Risks are associated with all business operations. Properly managed risks can lead to opportunities and value creation, while risks that are managed incorrectly can lead to damages and losses.
Trelleborg serves a broad range of customers in a variety of industries and niches. The business has a wide geographic spread. The Group has operations in 40 countries, sales are conducted in just over 140 countries worldwide and manufacturing operations are carried out at 100 production sites. The business is diversified geographically and across a range of different industries, which provides Trelleborg with an effective underlying risk spread.
Demand for the Group’s products and solutions largely moves in line with fluctuations in global industrial production. With the divestment of the business area Trelleborg Wheel Systems, he Group has become less cyclical since there used to be distinct seasonal effects especially in agriculture. The Group focuses on industries and geographies with healthy growth that can report consistent earnings even when adverse cyclical fluctuations occur in individual industries.
Trelleborg has chosen to group the risks into four areas.
Sustainability risks run as a common thread through these areas and relate to climate impact, work environment risks or risks in the area of human rights. It also includes the risks relating to failure to comply with laws and rules, both as a Group and among the Group’s suppliers.
Management and main activities
|Violation of laws and permits||Compliance with applicable legislation|| The Compliance Task Force leads and coordinates initiatives in this area.
Training seminars are arranged, including competition law and the EU’s General Data Protection
Regulation (GDPR). There is an established process for export control with a focus on embargoes
and trade restrictions, and there are procedures, for example, for approval of membership in
organizations and approval of collaborations with third parties.
Regular legal reviews are conducted with a focus on monitoring and ensuring compliance in the
Group companies. The Group’s internal controls, which are focused on regulatory compliance, have
been both expanded and formalized over the past few years.
During the year, the export control process was intensified with a particular focus on developments
in sanctions against Russia and Belarus.
|Corruption and fraud||Measures preventing fraudulent conduct|| Established policies and procedures form the basis of the work in this area, which is supplemented
with routine training and acceptance letters, signed yearly, for the relevant employees. Trelleborg’s Whistleblower Policy also entitles all employees to report any
suspected legal or regulatory violations without repercussions.
Review and evaluation of agency and distribution agreements are regularly conducted. The
Group’s internal policy instruments have been reviewed, and Policy Quick Guides have been
produced to further increase the distribution and comprehension of regulations and the Group’s
| Risks in the area of
|Child labor/forced labor in the supply chain|| Supplier reviews and supplier audits in the areas of risk are conducted based on the Group’s
geographic and materials risk assessments.
|Risks||Focus||Management and main activities|
| Work environment
|Health and safety|| Risks in the area of health and safety are managed via the Safety@Work program, refer to page
128. Issues concerning employees are otherwise monitored as part of compliance with laws and
codes and diversity & inclusion.
| Products in environments
| Review of products
| Not only risk assessments but also training and workshops are conducted to identify products
and contracts where it is especially important that the products comply with the quality and
functional requirements necessary in extremely demanding environments – for example, marine
infrastructure, marine hoses for oil and gas, healthcare & medical, and aerospace. Contracts and
processes concerning production and project management are also subjected to legal review and
| Inadequate and inappropriate
| Examination of
| Not only comprehensive training, but also internal and external legal reviews of contract issues and
evaluation of contracts in prioritized areas. In 2022, AI-based tools began to be used to review and
assess risks in agreements.
| Negative environmental
| Review of the sites’ local
environment and focus
on hazardous materials
| Environmental risks are identified in conjunction with all new construction and all acquisitions, with
a focus on chemicals management, rainwater and the risk of floods. Sites that are susceptible to
risk are routinely monitored.
The Global Chemical Task Force leads the work to phase out and replace substances that are
considered harmful and actively monitors developments in materials and chemicals legislation,
refer to page 38. In addition, there is ISO 14001 multi-site certification, which results in increased
standardized analysis and control.
|Risk of injury at sites|| Protection of critical
| External and internal analyses of the Group’s operations are carried out with regard to the most
critical sites. Also a more in-depth mapping of natural disaster risks is made, with a particular
focus on flooding and wind effects, including such risks that are related to climate change.
There are guidelines for new construction and upgrades of risk-classified sites. The number of
such sites upgraded to Highly Protected Risk (HPR) has increased over the past few years. One
aim is to improve the lowest performing and most critical sites.
| Disruptions to critical
|Minimize disruptions|| IT infrastructure service levels are in focus, as is the implementation of Group-wide upgrades in
a structured manner. Ensuring compliance with legal requirements in the countries in which the
Group operates is an important part, as is information security within and among the systems.
|Risks||Focus||Management and main activities|
|Commercial failures|| New product segments,
major projects and
| In conjunction with all acquisitions, there is a due diligence program covering the areas of finance,
operations and legal. New products in selected segments such as healthcare & medical and aerospace
are approved centrally before development work begins. For the past few years, there has
been increased business support when establishing new product segments and for larger projects
concerning liability risk management, legal risks and new establishments of operations.
|Climate risks|| Adaptation of production
| Climate and other environmental issues drive local legislation and political instruments, and
Trelleborg adapts itself to these in the relevant production countries. At the same time, several of
the Group’s products and solutions help to reduce atmospheric emissions and protect society from
climate change. Work aimed at reducing the Group’s fossil-fuel
dependence was intensified during the year with respect to both own products and production
| Reduction of
| In 2021, the Group resolved on new climate targets, “50 by 25”, for the period 2021–2025.
In line with society’s target to keep global warming below 1.5°C, Trelleborg’s climate target for
the period is to reduce direct and indirect CO2 emissions (Scope 1 and Scope 2) by 50 percent
relative to sales, with 2020 as the base year, and significant reductions of emissions along the
value chain (Scope 3).
For many years, energy efficiency has been the focus of the Manufacturing Excellence program.
|Political risks|| Geopolitics and
| In 2022, the Group started to discontinue its operations in Russia. The Group complies with
all relevant sanctions introduced as a result of the war in Ukraine and previous plans for a
manufacturing site in Russia were stopped early in the year.
The geopolitical situation is being monitored and is taken into account in all business plans.
| Supply chain
| Material shortages
| There was greater focus on the supply chain in 2022 compared with previous years, as a result of
disruptions to global deliveries and the impact of the Coronavirus pandemic and the war in Ukraine
on supplies. The Group has well-established tools in place to ensure parallel supplies and evaluates
and balances purchasing between local, or global, suppliers, which limits disruption.