Risk Management
The Mitsubishi Chemical Group defines risks as uncertain events that may have an upside or downside impact on the achievement of the goals of its corporate activities. Through healthy risk-taking by management and optimization of risk response, the MCG Group is striving to maintain and enhance its corporate value.
In an increasingly complex and unstable business environment, the Group has introduced Enterprise Risk Management (ERM) to enhance risk management, ensuring executive-level oversight of the identification, assessment, and response to risks which could have a material impact on the Group’s business operations.
Risk management structure
The MCG Group has appointed the president & chief executive officer as the supervising officer for ERM of the Group. The Company has established the ERM Council, which consists of the President & CEO and Corporate Executive Officers among others. The council deliberates on important matters such as the Group’s ERM and basic risk management policies, determines material risks that could have a significant impact on the Group as a whole, and monitors the status of risk management.
The status of risk management is reported to and supervised by the Board of Directors.
ERM process
1. Risk identification, risk scenario creation and risk assessment
In the Group’s risk management, risks are identified based on risk categories defined by strategy, function and process.
The division responsible for each risk under the supervision of a supervising officer develops risk scenarios for identified risks, assumes specific situations and events based on the scenario, and assesses the risk based on both its impact and likelihood.
2. Determination of MCG Group material risks
The ERM Council selects and determines material risks based on material risk selection standards taking into consideration the risk assessment results by strategy, function and process, and external environment analysis results.
3. Planning and implementation of risk response measures
The division responsible for each risk develops and manages a risk response plan. Each organization, in addition to implementing the plan, formulates an action plan to address organization-specific risks.
4. Monitoring
The division responsible for each risk monitors implementation of the risk response plan at each organization and requests additional response measures to be implemented as necessary.
Response to Material Risks
The ERM Council endeavors to ensure appropriate management of material risks through receiving reports on the status of responses, assessing the effectiveness of risk response plans, and requesting each organization to take additional measures as necessary.
In FY2025, the Council identified geopolitical issues, natural disasters and cybersecurity as material risks among others. The Company is taking measures tailored to each specific circumstance to avoid and mitigate impacts on our business performance and financial position.
