At GCPL, we have a comprehensive and structured approach to risk management. Across our geographies, we have integrated the way we manage risk into the operating framework and reporting channels of our business. Starting with Board-level oversight to a dedicated Risk Committee, a cross-functional team within the business, we routinely assess risks across the company and all geographies.
We have a Risk Management team as part of the Corporate Audit function. The team engages in discussion with various functional heads and relevant team members to identify potential risks, assess the business impact, and rate the likelihood of risk occurrence. The identified risks are presented to the Board. A cross-functional team was also formed at the corporate level to identify potential risks across businesses.
The identified risks will be reported to the Management Committee. All other employees keep sharing potential risks in informal forums, discussions, and annual conferences. We are also looking at creating a platform through which our employees can share potential risks.
Last year, we introduced a mobile app to identify and report potential safety-related risks.
Employees are always encouraged to provide feedback for continuous improvement in risk management practices. There is an annual In Tune survey conducted across the company seeking suggestions and feedback from our employees. We also conduct regular open forums and monthly review meetings to understand the emerging risks and developing mitigation measures. Valid risks identified are recorded by line managers and are communicated to the Management Committee for further action.
Training sessions on Enterprise Risk Management are organised throughout the year for employees at all levels. Inputs on risk definition, risk identification, risk rating, risk classification, risk prioritisation, risk mitigation, and risk control and review are imparted to participants. Additionally, workshops were conducted across all manufacturing facilities on crisis management during the fiscal year.
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Compliance and regulatory changes and emerging regulations |
We have the highest levels of statutory compliance and ensure all regulations and laws of the land are adhered to. Further, our Legal and Audit teams are in constant communication with key government departments and industry bodies to keep track of new and emerging regulations. They routinely assess and analyse regulations to assess how these will impact business and work towards mitigating them. |
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Supply chain risks related to the following:
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Our focus in manufacturing and supply chains is on becoming future ready. We have initiated projects related to Industry 4.0 and are making future-ready investments to ramp up our different processes. We have seen encouraging results in terms of improved productivity, greater accuracy, safety, and efficiency. We continue to introduce best practices across geographies and are trying to become more agile in responding to constantly changing consumer needs. Core to our approach is how we build win-win relationships with all our partners. We collaborate closely to ensure capability development and alignment with our core values. Our ongoing engagement with partners has helped us identify emerging issues and adequately respond to them in time. |
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Environmental risks and dependence on natural resources |
As a Group, we have always actively championed social and environmental responsibility. As part of our Good & Green vision, we had five environmental sustainability goals to be achieved by fiscal year 2020-21 to reduce our carbon footprint. We have made good progress against these goals and have analysed areas where we need to ramp up our efforts in the future. |
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Competitive risks:
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We have centred our growth strategy around emerging markets and the emergent consuming class in them. As incomes rise, purchasing power improves, and these markets mature; new distribution systems and the digital economy are enabling greater reach. To be able to leverage this, we are ramping up our go-to-market and digital strategies and our reach to go deeper and improve penetration. Our products range across home care, hair care, personal care, household insecticides, hair colour, liquid detergents, soaps and air fresheners, hair extensions, hair care, personal wash, styling in mass and professional markets, skin care, sanitisers, sun care, and female deodorants. We are the leaders in most categories we operate in. We are constantly innovating to create superior quality products at affordable prices. |
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Political economy in geographies of operation:
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Our focus is to build leadership in three categories (home care, hair care, and personal care) and in three emerging geographies (Asia, Africa, and Latin America). Our Risk Committee, along with regional business and finance teams, closely monitors the political economy of each geography to respond and adapt to emerging situations. Our globalisation strategy (called ‘3 by 3’) has been very deliberate. Guided by this, over the past decade, we have created significant value through M&A and established strong beachheads. |
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Labour risks due to the following:
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We take much pride in fostering an inspiring workplace with an agile and high-performance culture to attract, develop, and retain the best global talent. We have adopted best-in-class, globally acclaimed people policies and processes, which celebrate diversity and inclusion. |
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Social risks arising from the following:
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We are now exploring ways to further this commitment through shared value initiatives that create value for both society and business. Our business continuity plans are in place to address any man-made or natural disasters and ensure business as usual. |
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Cyber security: We depend on information systems and technology, including public websites and cloud-based services, for many activities important to our business, including communications within our company and interfacing with customers and consumers. Some of the threats facing our business are as follows:
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Mitigation measures comprise performing periodic risk assessment and mitigation, including threat analysis and vulnerability assessments. Our teams control, monitor, and log all access to protected assets. We have defined and enforced secure change control and configuration management processes. We are working towards sharing and training employees in incident-handling and contingency plans. Further mitigation measures include advanced web security, perimeter intrusion prevention, perimeter firewalls, application firewalls, internal firewalls, and advanced server security. |
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In addition to the risks identified by the Committee and by our team members, the fiscal year 2019-20 materiality study also pointed out issues which form a critical input to our formal risk criticality matrix. The material issues identified ultimately connect to broad risk drivers.
The risk assessment process is aligned to regional and global risks as identified by the World Economic Forum. These risks, along with the mitigation plan and opportunities, are listed below.
| Top material issues and associated business risks | Opportunities | Alignment with strategic pillars |
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Sustainable packaging: Increasing public awareness about environmental concerns has resulted in higher demand for sustainable packaging and processing operations. GCPL is already working to reduce plastic waste by creating thinner and lighter packaging and reducing waste. Some risks associated with sustainable packaging are as follows:
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GCPL believes that to develop an optimum sustainable packaging solution for any product, three distinct considerations are required:
A few of our mitigation efforts in this regard include the following:
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Research & Development: Research & Development is critical to the growth and prosperity of our business. The risks associated with this function are as follows:
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A two-pronged approach to innovation, including democratisation and creating new vectors of growth:
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Responsible marketing and communication: Social and responsible marketing practices are becoming the norm of the day, where companies acknowledge the larger social and environmental impacts of their products and services and/or adopt a specific social or environmental stance that resonates with their brand image. Associated risks are as follows:
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We adhere to the norms of the Advertising Standards Council of India and those of other local bodies in the international geographies as the basis for all our communications. All our marketing and advertising projects are in line with the expectations of these bodies, i.e. ‘legal, decent, honest and truthful’ and we ensure that all the claims we make have a scientific basis. |
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Building inclusive and prosperous communities: It is generally believed that CSR is a way of managing and reducing risk. However, in addition to its possible benefits, CSR also creates risks.
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Governance and accountability: GCPL’s sustainability governance aims to ensure the company’s commitments to its stakeholder groups with regard to its aim to create an inclusive and greener world. |
It is increasingly important for corporate boards to understand how these issues affect business strategy and performance. Impacts from these issues can be financial as well as material and can spread across multiple areas of a business.
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Occupational health and safety:
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We take much pride in fostering an inspiring workplace with an agile and high-performance culture to attract, develop, and retain the best global talent. We have adopted best-in-class, globally acclaimed people policies and processes, which celebrate diversity and inclusion. |
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Training and skill development: At GCPL, we believe that learning is a continuous process and happens on the job through a combination of challenging assignments and varying roles. Some risks associated with this aspect are as follows:
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