Risk management at the core of our activities
Sodexo operates in a constantly changing environment and is exposed to risks that, should they occur, could have an adverse effect on its activities, financial situation and reputation. In order to make the best business decisions, protect its assets and support its strategic priorities, the Group has a proactive approach to anticipate and manage these risks.
Our risk management approach
Sodexo has put a well-defined process in place for identifying, assessing and managing risks at different levels within the organization, from its employees working in the field to its leaders (see diagram).
Measures to manage the risks identified are implemented at site, country, regional or global level depending on their nature. The progress of these action plans is monitored and reported to senior management on a regular basis.
Operational managers are assisted by transversal support functions, which define the procedures and standards and provide tools and processes to help manage risks. Internal Audit carries out an independent assessment of risk management and makes recommendations for improvement. Overall responsibility for the robustness of risk management procedures lies with the Sodexo Leadership Team, while the Board of Directors and the Audit Committee provide risk oversight, ensuring that procedures are functioning effectively.
This diagram represents Sodexo's approach to risk management.
- Identify: Identify risks that could affect our business objectives.
- Assess: Evaluate the likelihood of the risk occurring and the impact.
- Mitigate: Develop controls and implement mitigation actions.
- Monitor and report: Review to ensure that we have the right plans in place. Insightful reporting.
Main risks
Each year, a risk profile is established based on the risk assessments performed by senior management with regard to the main entities, and also on interviews with senior executives. The risks considered to be the most significant for Sodexo as of August 31, 2024, are presented in this table.
This risk profile remains the same as last year.
Clients/consumers.
- Client retention: High level.
- Changes in consumer expectations and behaviors: Medium level.
- Bidding risks: Medium level.
- Competition: Medium level.
Operations.
- Client contract execution, including inflation management: High level.
- Technology and information security: Medium level.
People.
- Talent retention and development: High level.
- Staff shortages and recruitment: High level.
Corporate responsibility.
- Food, services and workplace safety: Medium level.
- Sodexo environmental impact: Medium level.
External environment.
- Compliance with laws and regulations: Medium level.
- Climate disruption exposure: Medium level.