Strategic and Emerging Risk Management

Value Chain Boundaries

Impacts of this topic reach Argos’ procurement processes and the supply chain.Supliers
Impacts of this topic are evaluated throughout all Argos operations.Argos
Impacts of this topic reach our industrial and/or retail clients.Clients
Impacts of this topic reach our communities, authorities and other individuals of the society.Society

Our management approach

Added value to the company

We create value by facilitating a control and prevention environment through the Integrated Risk Management System (IRMS), which establishes a methodological framework that manages events that can affect the achievement of the company’s objectives.

Added value to society

We evaluate impacts that our activities may have on society and the environment, encouraging responsible behavior that contributes to sustainable stakeholder development.

Strategic risks

  1. Decrease of market share or profitability due to inefficiency in the supply chain
  2. Loss of licenses or mining titles
  3. OH&S impacts on employees, assets, and facilities
  4. Impacts on the environment
  5. Changes in regulations and standards
  6. Information security
  7. Effects on reputation
  8. Penalties and effects on reputation resulting from investigations for competition laws
  9. Interaction with communities in the operations’ influence areas
  10. Market risks (competition, imports, new incoming products, substitutes, and prices)
  11. Country Political Risk
  12. Risks associated to variables and financial management (liquidity, market, credit and exchange rate)
  13. Impacts on operations by natural events
  14. Fraud, corruption and money laundering and terrorism financing
  15. Risks associated to the supply, reliability and variability of energy costs
  16. Talent, knowledge, and human rights risks when not aligned to our business goals and needs

Initiatives, commitments, and policies

Environmental Policy
Carbon Disclosure Project
Cement Sustainability Initiative
Global Compact
OHS Policy
Risk Management, Anti-fraud and Sustainability Policies
Risk-based Management Models
CEO Water Mandate

Governance

Employee at Roberta Plant, USA Region
Strategic risks

A-R11 A-R12 A strategic risk to our company is any significant event with a potential negative impact on our strategic objectives.

Through the Integrated Risk Management System (IRMS), we perform risk identification from a strategic perspective, which means management of risks to processes, projects, and facilities in all our operations, as well as to corporate governance, sustainability, and the continuity of operations. This focus allows us to align relevant aspects such as environmental management, communities, safety, regulations, and financial aspects, among others, with a global management focus that supports the successful execution of our strategy.

Emerging risks

A-R11 A-R12 An emerging risk is an event whose nature and consequences are not fully known. They are considered to happen at large-scale and arise from global trends. In this sense, we analyze and monitor them in order to be prepared and reduce the potential impacts on our business.

We have identified 14 emerging risks related to the top global trends, including climate change, innovation, demographic changes, technology, macroeconomic indicators, and new governments and their policies. We have defined their possible impacts and related opportunities for the company, and we have also created action plans that can help us prevent or mitigate them.

2016 performance

  • Consolidation of risk-based management models for communities, mining titles, human rights, nature events, and climate change.
  • Quantification of strategic risk scenarios.
  • Support to the OHS management system, in the definition and implementation of the methodology for the occupational and health risks analysis.
  • Risk analysis for our main facilities including, causes, key controls, and action plans.
2016 Goal tracking
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· We achieved a 90% completion for the basic stage of the risk management maturity model.
· We worked on risk-based management models.
· We developed strategic risk maps by country for the CCA and USA regions.
2017 Goals
  • We will consolidate the strategic risk maps for Colombia, CCA, and USA.
  • We will reach 65% for the intermediate stage of the maturity model proposed by our international insurance company, Sura.
  • We will consolidate the risk-based management models.
  • We will consolidate the emerging risks.