support this. There is also increased localisation of production; supply chains need to find ways to overcome potential future supply and trade restrictions. Risk management Risk taking is core to our innovation capacity, our entrepreneurial success and ultimately our sustained value creation and to exploiting opportunities. Enterprise Risk Management (ERM) is our process of assessing, treating and monitoring the effects of uncertainty that may affect the achievement of Givaudan’s objectives. We operate a structured system of identifying, assessing and deciding on responses to mitigate key risks. Through provident risk management, Givaudan aims to reduce or prevent negative impacts on its operations and business. The Board of Directors is responsible for defining and approving the ERM approach with the execution of the overall process delegated to the Executive Committee. Givaudan’s overall ERM system is based on ISO 31000. ERM applies across the business. It reviews different types of risks (threats and opportunities) in terms of their nature, their root causes/drivers and their consequences. Risks can have a quantitative impact on the EBITDA of the Group or a qualitative impact preventing Givaudan from reaching its long-term objectives and ambitions. We seek to consciously take the appropriate amount of risk, to manage these risks competently at the right level of the organisation, and to seize related business opportunities. We do conduct “zero-based” holistic risk refresh at the time of a new five-year strategy cycle. The last such holistic risk refresh was conducted in 2020 in connection with the 2025 strategy and the outcomes reported to the Board of Directors in early 2021. The Board of Directors reviews regularly whether the risks, especially the highest ones, are still pertinent. READ MORE For details on our enterprise risk management framework please consult: www.givaudan.com ▸ Our Company ▸ Corporate governance ▸ Risk management Increased priority for climate change risk As a business potentially affected by climate change, we have been carefully considering – with increasing scrutiny since the Our commitment to TCFD Financial markets need clear, thorough information on the impacts of climate change including risks and opportunities presented by rising temperatures, climate-related policies and emerging technologies. The Financial Stability Board’s TCFD aims to bolster the reporting of such climate-related financial information and Givaudan is committed to the initiative. We largely address it through our extensive reporting through the CDP Climate change questionnaire. READ MORE TCFD Recommendations ▸ page 163 2015 Paris Agreement – many of the topics addressed by the Task Force on Climate-related Financial Disclosures (TCFD). Although we have not yet completed the full quantitative analysis required by the TCFD, we are in alignment with its principles. This is largely demonstrated by the disclosures we submit through the framework of the CDP questionnaire and our subsequent reporting, which is included in our TCFD Recommendations mapping table on page 163. The TCFD will help us and others to focus on and evaluate our exposure to climate change, encouraging the disclosure of reliable information on climate-related risks and the showcasing of actions and opportunities. This in turn will serve to strengthen the stability of the financial system, contribute to a better understanding of climate risks and ease the financing of a transition to a more stable, sustainable economy. Defending against cyber pandemic The risk of cyber attacks has increased markedly, making information security a vital component for business resilience. Givaudan is addressing this risk through both technologies and behavioural measures. Givaudan fi 2021 Integrated Annual Report Strategic value creation Tr ends, risks and opportunities 29 Strategic value creation