Risk Management & Business Continuity
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Greif assesses organization-wide risk through our formal Enterprise Risk Management (ERM) process, which considers all Greif business units and geographies. Risk information is identified and analyzed through Greif’s Risk and Content Monitoring processes by assurance providers across the organization, including Executive Leadership, Internal Audit, Legal/Compliance, feedback from customers and investor engagement and Greif’s Sustainability Steering Committee (SSC). We monitor industry reports (i.e. World Business Council for Sustainable Development (WBCSD) ESG Enterprise Risk Management Framework, WRI’s Assessing the Post-2020 Clean Energy Landscape, and CSSR’s Fourth National Climate Assessment), ESG ratings and rankings, energy pricing, evolving government regulations and programs, and hold formal relationships with ESG-specific associations and NGOs, including WBCSD and the United Nations Global Compact (UNGC), to identify emerging risks that may impact our business. Information from these groups, including long-term emerging risks, is provided to Greif’s Risk Leader Committee (RLC), led by Greif’s chief audit executive, and is comprised of members of Greif’s Executive, Business Unit and Strategic Business Unit Leadership teams, department leaders such as legal, IT and HR and Greif’s VP of sustainability. The RLC identifies, ranks, reviews and prioritizes risks in conjunction with Greif’s Audit Committee to determine the most critical risks based on potential impact and likelihood to occur. Each risk is evaluated for potential opportunities and reported to the Audit Committee of Greif’s Board of Directors quarterly for approval. The RLC evaluates risks to develop plans for risk mitigation and opportunity capture. This committee meets quarterly.
Climate-related risks and opportunities are integrated directly into our overall ERM process and considered alongside all information provided by assurance providers across the organization. Through this process, Greif has historically identified extreme weather events, raw material price and supply volatility and rising sea levels as our most significant climate risks. Additionally, in 2020 through our ERM process, we have identified pandemics as a high-risk topic. For more information regarding our climate-related risk governance, risks and opportunities, please see section C2 of our CDP response.
In 2021, we held internal workshops to develop our colleagues’ understanding and awareness of climate-related risks and opportunities. Colleagues from various regions and departments attended the workshops and collaborated in cross-functional teams comprised of individuals with a diverse range of expertise to provide unique perspectives. Each team was responsible for identifying top risks and opportunities, creating risk and opportunity heat maps and brainstorming risk mitigation strategies. The risks and opportunities were broken into three different categories: market, physical and regulatory. We determined the top five risks to be carbon pricing mechanisms, natural catastrophe, obtaining renewable raw materials, shift in customer preferences and customer demand for sustainable products. We also identified three to five opportunities for each of the three categories and began conducting scenario analyses on the more impactful regulatory and markets risks. We also calculated the financial impact of the identified risks. The results will be presented to members of the Executive Leadership Team (ELT) in 2022 and determine how to include the risks in our ERM strategy and develop a plan to integrate them into our BU strategies. Please visit the Climate Strategy Section of our report to learn more about our climate workshops.
Beginning in 2019, Greif began incorporating results from our internal Global Trends Report into our ERM process. Based on interviews with internal leaders and secondary research, the report identifies six global trends with particular relevance to our business:
- Companies are Becoming More Environmentally Friendly
- Digitization & Automation of Manufacturing
- Digitization of Supply Chain & Logistics
- Digitization of Enterprise Purchasing & Business-to-Business Selling
- Workforce Shortages, Surpluses & Skill Gaps
- Growth Opportunities Increasing in Emerging Markets
In conjunction with other internal and external sources that are considered in our ERM process, the trend report improves our ability to forecast and plan for long-term trends that may impact our business in the future. In response to the “Companies are Becoming More Environmentally Friendly” trend, we have elevated sustainability in our business strategy especially in relation to innovation, resulting in an increased focus on post-consumer resin (PCR) products, reconditioning, designing for increased recyclability and growth of our intermediate bulk container (IBC) reconditioning networking. For more information regarding our trends report, please see the Innovation section of our Sustainability Report.
As a result of our materiality assessment and the TCFD gap assessment, we incorporated sustainability updates and risk statements into our 10K and proxy statements and included ESG-related issues and risks in Leadership Council meetings in 2021. We also selected ESG as a strategic priority area for the Leadership Council in 2021, where a key focus area is embedding our sustainability priorities – climate, waste, circularity, environmental compliance and diversity, equity and inclusion – into our culture, colleagues’ daily behaviors and risk management processes. In 2021, we began reporting key sustainability KPIs to the Leadership Council, Executive Leadership Team and Vice Presidents on a regular basis while also providing quarterly sustainability updates to the Executive Leadership Team. We also developed communication methods to provide regular sustainability updates to the entire organization including key updates on risks. We communicated through regular town hall meetings, webinars, and virtual plant tours in addition to weekly internal news updates and quarterly podcasts. We plan to continue these communication strategies in 2022.
To improve our ability to respond to potential crises, we launched a Crisis Management Program in 2019. Greif partnered with a third-party mass notification system to launch an alert system capable of notifying and updating our colleagues via text message, phone call, email and smartphone app during emergencies and significant situations that pose danger or disrupt work operations. The system is also used to convene Greif’s Crisis Response Team, a team of executive leaders responsible for coordinating communications and response to crises and executing Greif’s Crisis Communications Playbook. In 2020, all new Caraustar facilities were trained on the platform, which is now active across the Greif business portfolio. In 2021, our Crisis Response team facilitated two enterprise-wide crisis response tabletop exercises, one exercise focused on cybersecurity and the other on an industrial disaster. The exercises ensure appropriate procedures are in place to respond to unforeseen emergencies.
Our Disaster Recovery/Business Continuity program, established in 2017 in our Global Industrial Packaging (GIP) business, manages risk and business continuity through inventory and production redundancy capabilities, facility risk assessments and proactive labor relations. The program outlines a 25-step process to identify customer orders that may be impacted if a disaster impacts one of our facilities, alternative products that meet customer specifications and facilities that are able to produce the products our customers have ordered. In 2021, we conducted 15 random mock disasters to ensure the process is well understood in the organization and can be implemented should a disaster occur. The program, and our associated Disaster Recovery Business Continuity policy, are reviewed annually. Colleagues from sales, customer service, operations, marketing and logistics administer the program in tandem with business unit leadership.
Greif’s global network of 244 locations allows us to manufacture identical products at multiple sites, giving us the flexibility to shift production based on inventory, customer needs or in the unlikely event a shutdown would occur. This capability is enabled by centralized inventory management and our robust Sales and Operations Planning process (S&OP), which allows for visibility into raw and finished good materials across our facilities. Each facility multi-sources raw materials, ensuring production will not be interrupted due to delays or shortages from a supplier.
Greif’s facilities undergo loss control engineering inspections by our property insurance company periodically. These inspections are conducted by engineers and focus on identifying risks to the facility, including those that may be caused by natural disasters, and ways to reduce and control those risks. We make capital investments in our facilities to mitigate the risks identified in these inspections. For example, Greif recently opened a new facility in Pennsylvania. During the site selection process, we evaluated the risk of flooding to ensure the new facility was not located in a flood zone. We also installed a custom designed sprinkler system to best protect the facility in the unfortunate event of a fire. In 2021, we switched to a risk-based allocation model for property insurance. The change allowed us to receive improved rates on coverage for sites that are better prepared for natural disaster-related risk. This insurance model acts as a catalyst to drive improvements over time.
In 2021, Greif faced many challenges related to the Texas winter storms. To prepare, we held multiple meetings and implemented our Crisis Management protocols ahead of the storm. We shut down the equipment and closed the plants to give our workforce time to make arrangements. We struggled with lack of power, broken water pipes, and a burst fire suppression system. We halted operations for several days to prioritize the safety of our colleagues and their families. We then ensured the safety and integrity of our facilities prior to our colleagues returning to work.
At the onset of the COVID-19 pandemic, we created global and regional pandemic task forces to ensure we safeguard the health of our colleagues and the continuity of supply and service to our valued customers. These task forces continue to meet regularly to ensure we can continue operations and maintain colleague safety. As an essential business, we were able to continue to operate at nearly all our production facilities in more than 40 countries. Our global portfolio demonstrated our ability to fulfill customer needs worldwide during challenging macroeconomic conditions. To continue delivering on our commitments to our customers, we leveraged our existing Natural Disaster Recovery Protocol. This Protocol requires that all products must be able to be co-produced at multiple facilities and that each facility must maintain an alternate supplier list for the top 35 materials used in the facility. These supplier lists are maintained to ensure continuity of supply and that Greif production can be maintained in the event a supplier is impacted by a natural disaster or other event.
We also consider the risk of labor disputes to business continuity. We manage collective bargaining agreements on a two-to-three-year timeline, not simply when a negotiation must occur. Our senior leadership actively builds relationships with union leadership and members in each plant. This proactive approach ensures positive labor relations and business continuity.
244 Sites Around the World
Our global reach is near you.
Years of Experience
For the past 145 years, the world’s most important products have travelled around the world in Greif industrial packaging.