Risk Management
35
Our Business Framework
Financial
Our Purpose, Our Dream and Our Values
Risk Management is part of the
HEINEKEN Business Framework
Integrated approach
Risk profile
Risk appetite
Reputational
Business continuity
Introduction
EverGreen
Execution and change management
Policies
People
Processes
Systems
Data
Sustainability
Review
Other
Information
Financial
Statements
Report
of the
Supervisory
Board
Report
of the
Executive
Board
At HEINEKEN, Risk Management is an integral part of
doing business, supported by clear governance. Risks are
an essential element when opportunities are assessed
and strategies are set. Management decisions are
made in line with HEINEKEN’s risk appetite. Risks are
identified, mitigated and monitored on an ongoing
basis, as part of business routines. The increased
volatility in the past years (as a result of COVID and
the supply and energy crisis) has highlighted the
importance of active risk management.
HEINEKEN’s risk management approach addresses
the risks the Company inevitably faces in achieving its
strategy. Managing risks in a conscious manner
increases the likelihood of achieving our strategy and
business objectives. A proactive approach ensures risk
management is part of our executive conversations
and is embedded in our processes. This benefits our
decision-making and is essential to create and
preserve long-term value.
The HEINEKEN business framework articulates the key
elements that the Company relies on to operate
effectively and deliver long-term value creation while
protecting its people, assets and reputation.
Our Purpose, Our Dream and Our Values underpin our
EverGreen strategy, enabled by our organisational
structure and strong governance. The behaviours give
clear guidance to all employees on how to act and
foster a culture of achievement, collaboration and
growth, underpinned by a Behaviours Framework that
reflects the expected attitudes in decision-making.
Continuous Risk Management supports the
achievement of business objectives, based on our Risk
Assessment Cycle, the HEINEKEN Code of Business
Conduct and the HEINEKEN Rules.
In 2023 we conducted our first double materiality
assessment to prepare for compliance with the
Corporate Sustainability Reporting Directive (CSRD)
requirements. The risks identified as part of our risk
management process have been used as input to
perform this assessment.
As part of the Risk Assessment Cycle, operating companies and their Management Teams review and update
their risks on a continuous basis throughout the year. The Code of Business Conduct and its underlying policies set
out HEINEKEN’s commitment to conduct business with integrity and fairness, and respect for the law and our
values. The HEINEKEN Rules articulate how we work and the Standards to which we commit. They are a key
element for managing the risks faced by our Company and translating our objectives into clear instructions on
how to conduct our daily business.
An increasingly negative perception in society towards alcohol could prompt legislators to implement further
restrictive measures, such as limitations on availability, advertising, sponsorships, distribution and points of sale,
and increased tax. This may cause changes in consumption trends, which could lead to a decrease in the brand
equity and sales of HEINEKEN’s products.
HEINEKEN is predominantly a single-product business, operating throughout the world in the alcohol industry.
HEINEKEN is present in more than 70 countries, with a growing share of its revenues originating from
emerging markets.
HEINEKEN has undertaken business activities with other market parties in the form of joint ventures and
strategic partnerships and with independent distributors. Where HEINEKEN does not have effective control,
decisions taken by these entities may not be fully harmonised with HEINEKEN’s strategic objectives. Moreover,
HEINEKEN may not be able to identify and manage risks to the same extent as in the rest of the Group.
HEINEKEN’s systems of risk management and internal control, which are based on the COSO Enterprise
Risk Management and Internal Control Reference model, form a fundamental part of the HEINEKEN
Business Framework.
Code of Business
Conduct
How we behave
Behaviours
How we act
Laws and Regulations
Standards and Procedures
Risk Management
How we manage risks
Monitoring and Assurance
Governance
How we govern internally
HEINEKEN’s risk appetite is the result of its wide
geographical spread, prudent financial management
and commitment to long-term value creation. Risks
are taken consciously, assessing their impact on
HEINEKEN’s objectives. The level of risk HEINEKEN is
willing to take depends on the type of objective it
impacts (reputational, financial or business
continuity related).
HEINEKEN is reliant on the reputation of its brands
and the protection of its intellectual property rights.
Reputation management is of utmost importance to
HEINEKEN. We have invested considerable effort in
protecting our brands, including the registration of
trademarks and domain names. We aim to reduce
the risks that could negatively impact our reputation
to the furthest extent possible, accepting that this
may come at a cost.
HEINEKEN is keen on pursuing commercial
opportunities to deliver superior and balanced
growth, accepting uncertainties linked to its strategic
choices and the context of the individual markets in
which it operates.
HEINEKEN makes the availability of its brands a
priority, accepting only minimal disruptions to its
operations. In addition, HEINEKEN continuously
invests in making the organisation future-proof and
ensuring the sustainability of the business.
HEINEKEN Rules
How we work
Heineken
N.V.
Annual
Report
2023
