Sustainable Development Risk Management
Risk - Contaminated soil
No emissions or accidents of significance for the soil or groundwater were registered in 2024. There is limited soil pollution at one facility. The pollution is of a historical nature and remediation measures are carried out by thermal oxidation.
In Sweden, the environmental authority has requested an in-depth investigation of possible soil pollution at a production facility. Such an investigation was carried out, and no pollution was detected.
Risk management
Regular assessments of the risk for soil pollution and other environmental damage are made in conjunction with
acquisitions. Where deemed necessary, tests are carried out on soil and groundwater.
Through risk analysis and preventive measures within the framework of environmental legislation and ISO 14001, the probability and consequences of uncontrolled emissions are minimized.
Detailed information can be found in the Sustainability Report on pages 87–121.
Risk - Hazardous substances in buildings
The roofs of certain buildings consist of Eternit tiles containing asbestos. The risks are considered minor and do not require action to be taken until the roofs are to be replaced. Small amounts of asbestos are also present in pipework at a few sites. Under Swedish legislation, the Group performed an inventory of the properties with respect to PCBs (polychlorinated biphenyls). Some small amounts of PCBs were found in window seams in a number of buildings, and the caulking compound will be remedied as the windows are gradually replaced. The risks to humans and the environment are very low.
Risk management
Regular assessments of the presence of asbestos and PCBs are made in conjunction with acquisitions. In accordance with the legislation in different countries inventories has been carried out and relevant precautions have been taken. No further measures are currently relevant.
Risk - Climate change
The Group emits significant amounts of carbon dioxide through its energy consumption. In addition, most of the products are based on fossil raw materials.
Demanding emissions policies and accounting systems are being introduced in an increasing number of countries. In the EU, the Group is affected by, among other things, the Sustainability Reporting Directive (CSRD), where climate issues have been given considerable prominence. Furthermore, customers demand increased use of products with a low carbon footprint. Requirements for disclosure of the climate impact of products are also increasing.
Risk management
The Group works actively to chart and mitigate emissions of gases affecting the climate and originating from our production facilities and products.
Comprehensive scenario analyses have been conducted on how the Company is affected by physical climate change (acute, chronic), political decisions, legislation and changing customer behavior. The analyses have followed the
guidelines of the TCFD.
In the context of mergers and acquisitions and supplier assessments, climate-related risks are taken into account.
Detailed information can be found in the Sustainability Report on pages 87–121.
Risk - Environmental adaption of products
Interest in environmentally adapted products is increasing in many industries, and many of the customers set requirements regarding phasing out hazardous substances and other properties that are of significance to health and the environment, particularly mitigation of the climate impact. If the requirements are not met, there is a risk that the deal will be lost.
Risk management
The Group is taken an active role in the area and offers knowledge that contributes to environmental friendly
product development. The Group's portfolio of sustainable products is growing and shows good potential for business development.
Examples of sustainable products can be found on page 33 and in the Sustainability Report on pages 87–121.
Risk - Human rights
The risk for any violation of human rights in our own production facilities is considered low. Human rights issues are included in the Supplier Sustainability Guideline, where suppliers are required to report codes of conduct and policies. Most of the Group’s suppliers of raw materials are global chemical companies, and there the risks relating to human rights are considered low.
The Group has identified natural rubber suppliers as a potential area of environmental and human rights risk. Formal sustainability audits have therefore been performed at natural rubber plantations in Sri Lanka. The situation regarding human rights there was assessed as good.
Risk management
Materializing Our Values states how human rights are viewed. In the collected data for the annual Sustainability Report, all companies must state their position on questions regarding human rights in their own operation and among the suppliers.
The whistleblowing system makes it possible for employees to sound the alarm regarding possible irregularities.
Detailed information can be found in the Sustainability Report on pages 87–121.
Risk - Business conduct and anti-corruption
Unethical behavior or poor management of business conduct risks can damage the company's brand and credibility. The company may also be subject to fines and other legal sanctions.
HEXPOL operates in many parts of the world. No matter where the operations are, there is a risk of sound business principles not being applied. The message from the Group management is that zero tolerance is applied for anticorruption and deficient business conduct.
Risk management
Materializing Our Values provides employees with guidance on what is and is not allowed when dealing with business partners. Training on business conduct and anticorruption is carried out regularly.
The whistleblowing system makes it possible for employees to sound the alarm if irregularities are suspected.
Detailed information can be found in the Sustainability Report on pages 87–121.
Risk - Occupational health and safety risks
A poor work environment in production facilities can cause ill health and accidents at work, with significant consequences for individual employees. The working environment is also important for the well-being and retention of employees.
Risk management
The Group has a zero vision for work-related accidents and pursues an active and systematic work environment policy
to reduce the risk of work-related illnesses and accidents. Prevention is particularly important.
Detailed information can be found in the Sustainability Report on pages 87–121.
Risk - Environmental, health and safety, and other sustainable development legislation
Developments in environmental legislation affect the Group in both the short and long term. Changes in legislation, regulation and supervision that give rise to higher or changing requirements in the area of sustainability may require investments and lead to increased costs. Legislative amendments and changes in regulations could also impede or limit the company’s operations.
Climate change is an area where additional legislation, charges and taxes have been or will be introduced. In the area of chemicals, the EU’s REACH Regulation is highly influential. The Group uses substances listed by REACH as SVHCs (Substances of Very High Concern), and it is likely that demands that these be phased out (or that other risk mitigation measures be introduced) will increase. The Group uses PFAS substances in high performance elastomers.
The new EU directive on sustainability reporting (CSRD) and the upcoming sustainable development due diligence (CSDDD) require increased efforts from the Group.
Risk management
The Company works continuously to identify new and amended environmental and health and safety legislation. In the short term, we have not identified significant changes in the requirements for the operation of production facilities. The units hold current environmental permits, and only minor updates are expected. The units are under the supervision of the authorities, and internal and external environmental audits are conducted through the environmental management system ISO 14001.
With respect to REACH, the development departments have reformulated several formulas in which hazardous substances have been phased out or where their use has decreased. This work is ongoing and includes PFAS substances.
Adaptation to the requirements of the CSRD is ongoing, as indicated in the Sustainability Report. Detailed information can be found in the Sustainability Report on pages 87–121.
