Godrej Sustainability Report

23 The global economy continues to face a growing number of complex and interconnected challenges. From climate change and slowing global growth to economic inequality, businesses need to adopt a strategic approach to address these challenges. To understand the risk landscape, it is important to take a step back and think about the changes that are happening both inside and outside of organization. The Company is managing evolving consumer behavior, forming new partnerships, converging with organizations in other sectors, and adapting to new business ecosystems. The Company recognizes that Enterprise Risk Management (‘ERM’) is an integral part of business management and is committed to manage risks in a structured manner. The Company understands the effective ERM is essential to achieve strategic business objectives and long-term sustainable growth. The Company has well documented ERM policy which lays down the framework of Risk Management giving guidelines for proactive approach of identifying, assessing, prioritizing and mitigating the risks associated with business. The Company has a sound and structured ERM framework to address and manage the volatility and complexity of external environment associated with its business by alignment of strategy, processes, people, technology and knowledge. The current ERM framework is in line with global ERM standards which is aimed at creating a culture of Risk Enabled Performance Management (REPM) which integrates the ERM framework with strategy and planning process. The framework for ERM and the Risk management policy has been reviewed by the Audit Committee and has been approved by the Board. The Company has created risk infrastructure by setting up an ERM Executive Committee headed by the President of the Company. The committee periodically reviews the Risk Management framework and ensures the same is working effectively. It also reviews the risks and mitigation plans drawn by various businesses and functional risk teams to avoid unforeseen events. The individual Businesses/Functions are responsible for risk identification and mitigation plan, who as risk owners review and monitor the key risks to avoid undue deviations and adverse events and thus create value for the business. Top entity levels risks have been identified at the ERM Executive Committee level taking in the consideration the following: a) Bottom up approach - assessing the risks identified by businesses to identify critical risk having impact at entity level b) Top down approach - assessing risks emanating from long term planning c) Assessing and identifying risks which need mitigation at central level For each of the risk identified, risk owner, policies and procedures are put in place for monitoring, mitigating and reporting the risks on a periodic basis. The ERM Executive Committee also helps to prioritize these entity-wide risks identified and steer mitigation efforts in line with the Company’s risk capacity and appetite which in turn are reported to the Audit Committee and the Board. The entire process is independently reviewed by Internal Audit Department to ensure that the risk management framework is operating effectively. ERM Exective Committee Divisonal/Business Risk Management Teams Functional Risk Management Teams IT Risk Management Teams RISK MANAGEMENT