Managed risk­-taking

Risks and uncertainties

Each of the Volvo Group’s Business Areas monitors and manages risks in its operations. In addition, the Volvo Group utilizes a centralized Enterprise Risk Management (ERM) process, which is a systematic and structured framework for reporting and analyzing risk assessments and mitigations as well as for following up on identified risks.

Risk Categories

The ERM process classifies Volvo Group risks into four categories: strategic, operational, compliance and financial risks.

    Consequences Management
Long-term
STRATEGIC RISKS
Strategic risks may affect the Group’s ability to create value, the long-term development of the business and the possibility to reach the vision and aspirations.Strategic risks may affect the Group’s ability to create value, the long-term development of the business and the possibility to reach the vision and aspirations. Strategic risks are managed through strategic plans and business decisions taken by the Board of Directors, Executive Board and management teams throughout Volvo Group.
Short- and medium-term OPERATIONAL RISKS
Operational risks may affect the Group’s ability to enhance value and are important for the daily business. Operational risks are managed in operational business decisions throughout Volvo Group on all levels, by all employees.
  COMPLIANCE RISKS
Compliance risks may affect the Group’s ability to protect value against threats posed to its financial, organizational, or reputational standing. Compliance with rules and regulations are part of operational business management and decisions in all business in Volvo Group on all levels by all employees.
  FINANCIAL RISKS
Financial risks may affect the Group’s ability to enhance and protect the Group’s financial position. Financial risks are managed as an integrated element of business operations where parts of the responsibility have been centralized to Volvo Group Treasury following the financial framework; Volvo Group Financial Policies and Procedures.