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GRI Content: G4-2, G4-45, G4-46, G4-47, G4-49, G4-HR9


The SGS Board of Directors and Executive Management are responsible for the integration of risk management into key business planning processes. Every year, the SGS Board of Directors assesses the risks faced by the Group.

SGS Risk Management

To facilitate and optimize this process, the Group employs a comprehensive approach to identifying risk that involves the active participation of various management levels throughout the company. This risk assessment process is supported by our Enterprise Risk Management Framework.

Our risk categorization is structured as follows:

  • Strategy and planning risks – these arise when strategy selection and execution are inadequate and when there are external factors that can affect performance
  • Governance and integrity risks – these arise when the corporate governance structure and controls are inadequate and when the ethical culture and procedures are weak
  • Global support risks – these arise when core functions do not operate effectively and do not support business performance
  • Operations risks – these arise when business processes do not achieve the objectives required as part of the business model

The identification and assessment of financial risks are also part of this framework. This specific process is comprehensive and complex, which is why the mechanisms we use to identify, assess and mitigate financial risks are described in detail in our 2017 Annual Report.

SGS Business Materiality Matrix

In 2016, we reached a significant milestone in our journey towards integrated reporting by merging the outputs of our materiality and business risk assessment processes. The journey began with an extensive materiality assessment process, involving a consultation with around 850 stakeholders in 52 countries. These included customers, senior managers, employees, suppliers, NGOs, ratings agencies, sustainability professionals and academics. Alongside the survey, we conducted a detailed benchmark review of globally relevant and sector-specific sustainability issues and trends.

Having conducted a weighted analysis of the results of our materiality assessment by stakeholder type, we integrated the business risks identified in our annual Board of Directors risk review to provide a more complete picture of the most salient issues for SGS. This resulted in a consolidated list of environmental, social and governance topics. Next, we conducted an impact assessment, which involved over 80% of Operations Council members participating in an online survey to rank each topic (covering business continuity, economic performance, reputation and legal compliance) according to its relative impact on the business and assessing the controls in place to manage that impact.

The outcome of the processes described above was the development of our first Business Materiality Matrix.  In 2017, we carried out a high level review of the material topics identified, adapting the Materiality Matrix to new trends. The review included the integration of updated information from sustainability ratings, financial analysts, media and investors and new business risks raised as a result of our three-level risk identification process.

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