Strategy and Risk Management

Annual Report 2012

Political risks

The Group operates in regions that at times are characterized by severe political instability, riots and uprisings and general conditions of extreme variability which entail considerable risks to the control, smooth operation and returns of its investments. The management of said risks is undertaken through the undertaking of specific measures in each case, aiming at the maximum possible safeguarding of TITAN’s local investments.


Social risks

Like other industry peers, TITAN Group is exposed to a number of social risks. The major material social risks we face are related to health and safety issues as well as human rights.

To mitigate these risks with respect to safety, relevant audits and management reviews are conducted every year in all production plants following ISO requirements. Moreover, in 2011, a new process was launched at Group level to provide an overall assessment and benchmark of potential health and safety risks. Further details on safety risk mitigation measures, management and systems can be found in the “Health and Safety” section of this Report.

According to the materiality assessment and the feedback received from its key stakeholders, the risk of human rights abuses is estimated to be a moderate risk for TITAN operations. However, to assess the Group’s readiness and maturity in addressing these risks, an evaluation of relevant policies and grievance mechanisms employed by the company was completed in co-operation with CSR Europe. Furthermore, all contracts with suppliers (large and small, global and local) refer to issues such as safety and working conditions, which are of major importance. Also, TITAN is committed to collaborate with peers in the framework of a CSI Working Group for sustainability in the supply chain, where is examined a process of social and environmental requirements harmonization addressed to all suppliers servicing the sector. Accordingly, TITAN will include relevant clauses in the contracts with its suppliers, as well as relevant criteria in the process of assessing suppliers’ performance, as soon as the Working Group finalizes a unified guidance document for distribution.

The risk of corruption is increasing according to the outcomes of Transparency International Index in 2012. TITAN Group thoroughly examines the risk of corruption particularly in countries identified as the most vulnerable. To assess the exposure of TITAN operations to such risks, the review of Transparency International Index, as well as country reports, are considered by local management teams and the Group CSR Committee on an annual basis, while the Group Internal Audit Department conducts internal audits to secure full compliance with TITAN commitments, as defined by Group Code of Conduct and relevant procedures. The majority of TITAN employees (more than 60%) are provided with additional tools like Direct Employee Communication Lines to report even anonymous complaints or cases of non-compliance with TITAN’s Code of Conduct, and particularly human rights abuses and risks of corruption.

In 2012, a total of five reports were filed through the Direct Employee Communication Line and all five cases reported were independently investigated and resolved. Two of the cases were filed in Greece, two of the cases were filed in the U.S. and one case was filed in Greece referring to Southeastern Europe operations.


TITAN operations exposure per country according to 2012 Transparency International Index

Perception Index
Group Employees
Country Score %
U.S.A. 73 30.98
Turkey 49 4.52
F.Y.R. of Macedonia 43 6.14
Bulgaria 41 5.51
Serbia 39 4.79
Greece 36 20.97
Kosovo 34 9.05
Albania 33 3.94
Egypt 32 14.11

Environmental risks

The Group has a number of environmental risks as related to climate change, carbon emissions and potential changes to the global carbon emissions trading regimes in particular. Like many energy intensive manufacturing industries, cement production generates emissions other than CO2, however. The risks associated with the release of mercury and its compounds on people's health, for example, and the environment is of great concern to stakeholders, in particular local communities and regulatory authorities.

The section in this Report on the Environment provides further details on the risks TITAN faces and measures taken to mitigate them.

In addition to the risk areas that have been documented in previous Reports, in 2012 the Group further recognized risks related to water usage and management, particularly in areas potentially facing water shortages.