The Company has a Business Risk Management (BRM) Policy that defines two types of risks: corporate risks, covering the macro environment, legal matters and regulations, financial considerations, business support, planning and image; and business segment risks which focus on cement industry-specific areas such as the market, projects, CSR, HR, sustainable environment performance, better cost management (BCM), product management and innovation (PMI), etc. The Board of the Company is responsible for framing, implementing and monitoring the risk management plan. The Risk Management Committee of the Board lays down the procedures to inform the Board about identification, assessment, monitoring and mitigation of various risks faced by the business. Risk management forms an integral part of the Company’s mid-term planning (MTP) cycle. The Committee reviewed the risk trends, exposure and potential impact analysis carried out by the Management. MD & CEO as well as CFO specifically confirmed to the Committee that mitigation plans were finalised and up-to-date, owners identified, and the progress of mitigation actions monitored. The Committee met once during the year.
The directors of the Board are also part of various committees such as the Risk Management Committee, CSR Committee, Compliance Committee, etc. This enables them to engage effectively with the process of risk management. The BRM process identifies risks and opportunities at the corporate as well as operational levels, taking into account social, economic and environmental risks. The objective of the BRM process is to improve awareness and manage the Company’s risk exposure. Our risk assessment and management policy support a sustainable business module for increased profitability. Management is provided with relevant data to identify emerging issues. This approach helps us to develop new and better products and processes that protect our corporate reputation and improve shareholder value. The sustainable business module prompts us to look at risks in a broader framework, moving away from the traditional economic, strategic and operational considerations towards social and environmental issues. It allows us to consider emerging risk areas and look for opportunities presented by risks that are overlooked by other analytical and systems-driven approaches. Emerging sustainability issues in our industry include climate change, social inclusion, depletion of non-renewable resources, brand damage (including boycotts), shareholder actions related to sustainability issues and disclosure of historic environmental liabilities.
Sustainability risk management requires the evaluation of many aspects of the operation that are not part of most current corporate programmes, such as energy consumption, emission of greenhouse gases, water use, waste management, alternative fuels and raw materials (AFR), etc. A holistic point of view assures sound financial management, ethical corporate governance and transparency with respect to our stakeholders. At Ambuja Cement, we address many aspects of sustainability, improving business efficiency and ultimately boosting profits. Efficient productivity implies reducing material requirements and energy for production, lowering emissions, improving recyclability, improving the durability and reliability of products, and maximising the use of renewable resources.
Implementation of our sustainability programme starts with an understanding of the corporate and regional principles and values that unify our work, people and actions. These are based on our historic ideals, our reputation today and our quest to continue in like manner. The first step towards implementation is assessment of risks/opportunities; all the possible risks/ opportunities are identified and mapped on a matrix to identify sustainable development issues of importance to our stakeholders and to the Company. These risks/ opportunities are then prioritised and action plans formulated in the form of projects.