Financial Statements - Solvay

Management of Risks
Acting responsibly as a corporate citizen and caring for the health, safety and environment of its employees and the
community at large are key components of Solvay’s vision that are embedded through the Group’s Responsible Care ® policy.
Since its foundation in 1863, Solvay has successfully demonstrated its ability to anticipate and respond appropriately
to an ever-changing world and to achieve sustainable and profi table growth with a profound respect and concern
for the environmental and social contexts in which it operates. During its June 2006 strategic review, the Executive
Committee highlighted risk management as a priority, and decided to further enhance the related processes and
measures implemented throughout the Group. Solvay is attentive to taking adequate and selective measures to continue
on this path. In the context of the present economic and fi nancial crisis, these elements constitute very important assets
for helping the Group to face its various challenges.
In its 146-year history, Solvay has built up a solid track record of good practices in the management of the risks inherent
to its chemical and pharmaceutical activities. The diverse businesses within the Group generate a variety of risks, some
of which could possibly affect the Company as a whole. But diversifi cation contributes to the reduction of the overall risk,
as the Company’s different businesses, processes, policies and structures offset some risks against each other, merely
through a balanced portfolio of products.
Solvay’s policy is to achieve good Enterprise Risk Management:
– our policy is to identify, assess and manage all potentially signifi cant business opportunities and risks, by applying
systematic risk management integrated with strategy, business decisions and operations;
– while continuously improving our risk management capabilities, we achieve risk awareness and confi dence in
entrepreneurship and make risk management part of everyone’s job.
Solvay has defi ned ten categories of risk:
– Market & Growth – Strategic risk,
– Supply Chain and Manufacturing risk,
– Regulatory, Political and Legal risk,
– Corporate Governance and risks attached to Internal Procedures,
– Financial risk,
– Product risk,
– Risk to people,
– Environmental risk,
– Information and IT risk,
– Reputational risk.
A special Competence Center within Financial Management develops tools, provides advice and proposes strategies
to help entities manage their risks more systematically. In the course of 2006-2008, each Business Unit was analyzed
to identify the signifi cant risks, in the above ten categories, and initiatives have been undertaken to mitigate the main
ones among them. This group-wide risk analysis with ensuing risk reduction measures will be repeated in 2009. Risk
management is now widely integrated into enterprise strategies, enabling the Group to move ahead in major investment
strategies cognizant of the attached risks and taking the necessary steps to mitigate them.
The following objectives have been validated for 2012:
– systematically improving risk management in each of the ten categories;
– raising awareness so that each manager knows the main risks in his or her own area of responsibility, and steps
that can be taken to reduce them.
The purpose of this report is to describe the risk associated with each category and to outline the actions undertaken
by the Group to reduce that risk. The dramatic deterioration of fi nancial markets and of global macro economic conditions
has increased risks like volatility of raw material and energy prices, counterparty risks and reduced availability of funding.
Solvay has responded with appropriate mitigation measures. The Sustainable Development initiative is helping to reduce
risk and realize opportunities, especially in the Strategic Risk area.
Financial
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Solvay Global Annual Report 2008
Financial