Plastic Omnium - 2020 Universal Registration Document

RISK FACTORS AND MANAGEMENT PLASTIC OMNIUM UNIVERSAL REGISTRATION DOCUMENT 2020 65 Ultimately, every automotive program is exposed to the risk of disruption of carmaker’s demand, of variable duration. This disruption may be the result of hazards specific to the carmaker (fire in one of its plants, shutdown of the carmaker’s plant due to a strike, etc.) or external hazards (pandemic or natural disaster affecting one or more plants of a carmaker). This disruption can also result from a similar hazard that would impact a supplier of components used in the manufacture of a vehicle, which could thus force the carmaker to permanently stop its production line for lack of components. Risk management Compagnie Plastic Omnium SE’s commitment to diversifying its businesses and increasing the number of automotive programs represents a key component of its strategic vision that significantly reduces exposure to geographic and other risks. Compagnie Plastic Omnium SE has 93 customer brands, comprising nearly all of the world’s major carmakers and serving different market segments and three distinct large product families. It continues to diversify its exposure to worldwide automotive production markets with its businesses spread across 25 countries and with the launch of more than 200 new programs in production each year. In terms of commitments, all new projects are subject to a highly detailed approval process. The largest projects must be authorized by Compagnie Plastic Omnium SE’s senior management. Once a project has been accepted, a structured operational and financial monitoring system is set up to track it. RISKS RELATED TO THE QUALITY OF PRODUCTS AND SERVICES SOLD Identification of risks Compagnie Plastic Omnium SE is exposed to the risk of warranty and liability claims from customers in respect of the products it sells and services it provides. This is particularly the case for the Clean Energy Systems business line, where the majority of products sold to carmakers belong in the “safety equipment” category. Compagnie Plastic Omnium SE is also exposed to the risk of third-party product liability claims. Risk management In terms of product and process quality, the Group’s business lines have set up dedicated organizations and processes according to models that have been prevalent for many years in the automotive industry. These organizations and processes aim to prevent, identify and correct quality problems as soon as they occur. The robustness and efficiency of these organizations and processes are checked by annual internal audits and regular customer audits. They are also covered by an ISO/TS 16949 certification procedure for all of the Group’s plants and development centers. These risks fall into the area of contractual liability and are covered by specific insurance policies. HEALTH, SAFETY AND ENVIRONMENT RISK Identification of risks during a pandemic), environmental damage (pollution), non-compliance with or the tightening of regulatory requirements in the areas of health, safety and the environment. Such events may generate additional costs or investment expenses for Compagnie Plastic Omnium SE in order to remedy the situation, comply and may lead to sanctions. Compagnie Plastic Omnium SE’s sites are exposed to risks such as workplace accidents, occupational illnesses, health risks (particularly Risk management With regard to health, safety and the environment (HSE), Compagnie Plastic Omnium SE has introduced a policy that is described in the “Statement of Non-Financial Performance” section of this document. Rolled out worldwide, this policy is based on a shared vision, a structured management system, regular reporting and an ongoing certification program. This policy is overseen by Compagnie Plastic Omnium SE’s Executive Committee, based on specific monthly reporting that shows the individual performance of each subsidiary, as part of an active system set up to help drive continuous improvement. A dedicated organization comprised of front-line health, safety and environment (HSE) coordinators is responsible for supporting and coordinating its deployment. This network of experts is led by Compagnie Plastic Omnium SE’s HSE Department, backed by central HSE managers at the business line level. Final responsibility for managing health, safety and environment risks lies with senior management. In 2020, this organization enabled a standard protocol, allowing business continuity in complete safety in the context of the Covid-19 pandemic, to be deployed in all of the Group’s sites. Ongoing corrective and improvement action plans have been introduced and included in the programs to obtain ISO 14001 and OHSAS 18001 certification for industrial facilities. These plans foster wider adoption of best practices. They include training on ergonomics, the man-machine interface and the tools of the in-house Top Safety program and bringing machinery and equipment into compliance. INFORMATION TECHNOLOGY RISK Identification of risk The day-to-day activity of Compagnie Plastic Omnium SE’s operational functions (Research and Development, Production, Purchasing, Logistics, Commercial) and support functions Finance, Human Resources, Legal) is highly dependent on the smooth running of the information systems used in these functions. This activity could be affected by the unavailability of critical information systems, mainly due to system breakdown, communication networks failure, damage to infrastructure or malicious actions carried out internally or externally. Risk management The Information Systems Department has implemented a systems standardization and consolidation approach, and is constantly upgrading IT and network production infrastructures, business applications and workstation services. Management pays special attention to the incorporation of new technologies and to the availability and integrity of Company data. The security of technical systems, applications and networks is addressed at the outset of projects. It is constantly monitored and regularly audited.