Mercuria CSR report 2023 - Flipbook - Page 27
PLANET 2023
RISKS
HORIZON *
POTENTIAL FINANCIAL
IMPACTS
MITIGATION MEASURES
Transition Risks
Policy and Legal
Unforeseeable changes in
government policies and
regulations
Increase in price of carbon
credits needed to offset our
Scopes 1 and 2 emissions
Exposure to litigation
-ML
Changes in regulations can
impact market dynamics,
leading
to
increased
competition or costs.
We mitigate policy and legal transition risks by diversifying
our product portfolio and investing in diversified assets in
different locations. This strategy enhances our adaptability
to regulatory changes and diversifies our growth
opportunities, thereby stabilizing revenue streams.
SML
Increased operating costs by
escalating
the
expenses
associated to offsetting our
Scope 1 and 2 emissions.
To mitigate the financial impact of rising carbon credit
prices, we are investing in renewable energy sources and
carbon capture technologies. These investments reduce
our reliance on external carbon credits and lower our net
emissions, ensuring more stable and predictable operating
costs.
-ML
Additional financial costs such
as penalties, settlements and
legal fees, impacting overall
profitability.
Our stringent policies and regulations, combined with
robust legal and compliance infrastructure, are an integral
component of our business, designed to prevent and
mitigate litigation exposure.
-ML
We mitigate technology risk by strategically updating our
Early retirement of existing investment portfolio with superior technology, ensuring
assets with lost expenditure resilience and competitiveness through portfolio
diversification even if some investments do not perform as
on asset.
expected.
SML
Reduced
demand
for
certain
products
or
markets leading to lower
sales
volumes
and
revenues.
Both product types and asset investments are
diverse in nature, hedging a decrease in a revenue
stream for any single product or asset.
SML
Various factors, including
rising raw material and
shipping
costs,
can
significantly influence our
cost structure.
Our highly skilled teams proactively analyse and
assess situations that could lead to increased costs,
whether in raw materials or operations, and
strategically optimize cost efficiency to maintain our
competitive edge.
SML
Risks associated with the
reputation
of
our
counterparties
could
potentially impact our own
reputation and impact our
financials.
To mitigate risks associated with our counterparties,
we enforce a rigorous Know Your Counterparty (KYC)
system and continuously monitor up-to-date news
regarding all counterparties. Should any risks
emerge, we promptly discontinue engagements to
safeguard our operations.
SML
Negative feedback from
employees
and
other
stakeholders can lead to
talent attrition, which may
result
in
increased
recruitment and training
costs,
potentially
impacting the company's
financial stability.
We carry out annual surveys based on the GRI
standard to assess our position with respect to our
operations and our employees. We act in accordance
with the results to ensure our stakeholders’
satisfaction.
Technology
Invested technology
replaced by better
alternatives
Market
Change in customer
preferences
Changes in costs
Reputation
Counterparty-related risks
Negative stakeholder
feedback
*Horizons are short 1 year (S), medium 2-5 years (M), and long above 5 years (L)
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