EMERGING RISKS AND OPPORTUNITIES Emerging Risks Impacts and Opportunities Risk Rating Link to Material Topics IVL’s Response 1. Risk of increasing polarization in the world and protectionist sentiment in many countries may lead to new legislation and tighter restrictions impacting the movement of goods, services, capital, labour, technology, data, and information, thereby adversely affecting our business and operations. - Opportunity to proactively invest in additional legal resources in key regions and specialty disciplines to support our business and better inform our Business Continuity Management strategies. - Impact can be severe if there is a breach on compliance on regulation pertaining to changes in foreign laws; currency controls, tax regulations, and changes in international tax treaties; sanctions, the imposition of duties on imports; anti-dumping duties; data privacy, anti-corruption, environmental and regulatory requirements which could lead significant prosecution and fines, litigation including class actions, etc. Likelihood Unlikely Impact Severe Compliance Management (Regulatory and Environment) Risks and Crisis Management, pg. 62-65 2. Accelerated global digital transformations and the interconnectedness and convergence of digital tools may lead to market disruptions, new business models, unconventional competitors and/or industry consolidation. - Implement robust cybersecurity measures to be a trusted partner and leader in data privacy. - Educate users of the risks of cyber threats and train them on safe usage of the system. - Opportunity for continuous cybersecurity improvements. - Expose to cyberattacks, data privacy infringements and critical systemic information infrastructure breakdowns - Could not meet customer demands, secure the businesses, sustain growth and remain competiveness Likelihood Unlikely Impact Moderate Cybersecurity Cybersecurity Management, pg. 66-67 3. With the rise of a contactless economy and exchange, companies are expected to reinvent rules as employees seek new ways of working (such as remote work, flexible hours, or a synchronous work schedules) and life beyond work. The inability to adapt to a new work culture and redefine the workplace may weaken our Employee Value Proposition (EVP) and affect talent attraction and retention. - Grow the Company’s talent pool without geographic boundaries. - Introduce a hybrid and flexible work culture. - Provide developmental support to leaders to adjust to new remote leadership requirements. - Fall short of attracting new talents, high turnover, more human capital investments - Affect businesses, operations and company reputation Likelihood Possible Impact Major Human Capital Development Occupational Health & Safety andWell-being Retaining Talent pg. 143 With our operations across different continents, we are especially focused on identifying various risk factors that could potentially have a short, medium, or long-term impacts on our business. Our internal risk management mechanisms and robust governance practices empower us to develop business strategies to effectively manage and mitigate these risks. We have disclosed howwe align our sustainability-linked material topics with our top three emerging risks in this report. For more information about other risks and our riskmonitoring and control mechanisms, please refer to pg. 94 in our 2021 Annual Report and pg. 45 in this Sustainability Report. Insignificant Remote (<1%) Unlikely (1<15%) Possible (16<30%) Likely (31<50%) Likelihood Almost certain (>50%) Minor Moderate Impact Major Severe 3 2 1 45 SUSTAINABILITY REPORT 2021 Responsible Business and Effective Governance Driving Sustainable Value Creation and Growth Towards Net Zero Carbon Empowering Our People and Communities Global Performance Data GRI Standard Content Index
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