Risks
Short-term risks and uncertainties
The most significant short-term risks for Apetit Group are related to global political instability and potentially significant market changes, as well as the management of raw material price changes, the availability of raw materials, the harvest quality and quantity of oilseed plants and field vegetables, the functioning of the financing markets, the solvency of customers, the delivery performance of suppliers and service providers, and changes in the Group’s business areas, customer relationships and purchasing behavior of consumers.
Risks, uncertainties and risk management
The main operational risks concern the availability of raw materials, the time lags between purchasing and use, and fluctuations in raw material prices. Price risk management is particularly important in Oilseed Products. The prices of oilseeds are determined in the world market. In Oilseed Products, limits are defined for open price risks.
The Group operates in international markets and is thus exposed to currency risks arising from changes in exchange rates. Under normal circumstances, currency risks are low.
Fire, serious process disruptions or other reasons leading to disruption of production, or defects in raw materials or final products affecting food safety can lead to major property damage, losses from production interruptions, liabilities and other indirect adverse effects on the company’s operations. The Group companies guard against these risks by evaluating their processes through internal control and other systems and by taking corrective action where necessary. Insurance policies are used to cover risks always, when insurance can be justified on financial or other grounds.
The assessment of Apetit’s most significant risks also covers non- financial risks. A typical effect of the realisation of a non-financial risk would be a negative reputation effect. Apetit Group’s Code of Conduct guides all operations in Group. Apetit requires that all of its employees and suppliers comply with the Code of Conduct. Climate related risks are discussed in more detail in the non-financial information section.
Environmental risks
Apetit’s operational activities do not involve direct significant environmental risks. The principal environmental risks at Apetit’s production facilities concern potential wastewater and vegetable oil leaks into the environment and refrigerant leaks. Environmental risks are managed by means of internal and external inspections and by complying with environmental requirements and monitoring the company’s environmental performance. Some of the company’s operations have ISO 14001 environmental management systems.
Climate-related risks and opportunities
Apetit has carried out a study on the risks and opportunities related to climate change in accordance with the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures).
The most significant climate-related risks in both of Apetit’s businesses are harvest risks related to the procurement of raw material. Extreme weather phenomena caused by climate change can have a significant impact on annual harvest levels. Apetit manages this risk particularly by developing cultivation methods and conducting tests on different plant varieties. The financial impacts of changes in the harvest levels may be significant in the short term. In the long term, climate change may also lead to growing disease pressures due to changes in the cultivation conditions, for example.
Apetit’s most significant climate-related opportunities are related to changes in consumer behaviour, with eating habits shifting towards more plant-based diets and climate-friendly consumption. Apetit’s sustainable food solutions and plant-based food products support planetary health diets very well. Apetit is also developing the use of diverse plant proteins in its products.
Social and employee-related risks
Safety at work is vitally important for Apetit and one of the central themes of the personnel strategy. Any occupational accidents are among its most significant social and employee-related risks. The company actively provides information about aspects related to occupational safety, and each supervisor must complete a training programme related to safety at work.
Ensuring a competent and motivated workforce has also been identified among social and employee-related risks. Apetit’s personnel strategy focuses on responsible leadership based on the company’s values and corporate culture, ensuring the availability of labour by focusing on retention and attraction factors, improving employees’ occupational well-being and ability to cope with the demands of work by using a wide range of work ability management methods, and the continuous development of strategic and critical competencies.
Risks related to human rights
The most significant risks related to human rights arise from the production chain and are related to working conditions of people working in Apetit’s supply chain. Apetit is committed to, and requires its suppliers to commit to, its ethical requirements for suppliers, which describe sustainable operating principles concerning ethical, social and environmental aspects. Apetit Group’s ethical supplier requirements are based on the guidelines of the UN’s Global Compact initiative.
In its sourcing responsibility guidelines, Apetit has defined the statements required from suppliers regarding the management and realisation of social and environmental responsibility. More information about procurement and supply chain management is available in the company’s sustainability report.
Risks related to corruption and bribery
If Apetit’s employees or stakeholders engage in unethical operations, this may have a negative effect on Apetit’s reputation, in addition to having financial effects. The most important management method to avoid unethical ways of working is to increase awareness of ethical operating methods, for example.