Business conduct impacts, risks, and opportunities (SBM-3)

Material impacts, risks and opportunities and their interaction with strategy and business model

Epiroc has sales in around 150 countries, where we adhere to laws and regulations, and uphold high ethical standards. Our growth strategy require us to ensure that the companies that we acquire uphold the same standards. The different geographical locations of our sites, suppliers, and customers provide different risk exposures as market complexities and varying environmental, social, and governance laws affect our exposure to sanctions, corruption, human rights risks, and environmental risks.

Epiroc may be affected by various government actions. In general Epiroc is not actively and directly engaged in lobbying actions related to governments. Instead, we are a member of selected industry trade associations and we are also member of certain government-led partnerships, notably in the EU, that aim to promote safety and energy efficiency within our industry. We continuously monitor regulatory developments relevant to our industry and operations. 

Upholding our Code of Conduct and protecting whistleblower anonymity and confidentiality is crucial for maintaining a transparent and ethical business environment. A potential risk is failing to effectively engage employees, especially those from newly acquired entities, in embracing our corporate culture, ethics, and adhering to our policies. This could harm employees, for example by unequal treatment and harassments, and our relationships with suppliers and customers. Failure to protect whistleblowers from retaliatory actions could foster a culture of fear and silence among employees. This may result in prolonged unethical practices affecting workplace safety and compliance, legal liabilities, fines, and reputational damage, while hindering the identification and prevention of wrongdoing.

These risks impact all levels of our value chain, particularly internal operations, and employee interactions, and may extend to our relationships with business partners who need to trust our commitment to ethical conduct and transparency. If not addressed, these issues could result in financial impacts such as reduced productivity, difficulties in talent attraction and retention, and reputational damage to the Epiroc brand.

To mitigate these risks, we implement comprehensive onboarding, integration programs and mandatory compliance training that emphasize our ethical standards and corporate culture. Acquired companies are given access to the Epiroc Way, which is the management system for Epiroc, outlining all documents and processes for how Epiroc conducts business. Acquired companies are normally also ISO certified within two years. To ensure whistleblower anonymity and confidentiality and to comply with applicable legislation, we have implemented our whistleblower system Speak Up. Our whistleblower policy and system are evaluated regularly to ensure protection of whistleblowers.

Corruption, bribery and any unethical business practices hinder economic and social development, erode trust in institutions and damage business environments. As a global company, we may face corruption risks across our value chain, particularly in regions with weaker institutions. Any instance of corruption could lead to legal and financial consequences, damage our reputation, and hinder social progress. Recognizing these risks, we maintain a zero bribery and corruption tolerance to protect our integrity, performance, and the communities we serve. Our commitment to ethical practices is stated in our CoC and Business Partner CoC and apply to all our operations worldwide. Certain roles such as managers, sales and sourcing employees, as well as interaction with third parties, have increased exposure to these risks. To mitigate these risks, we implement specific activities such as targeted training and risk assessments.