Groupe Renault - 2020 Universal Registration Document

101 GROUPE RENAULT I UNIVERSAL REGISTRATION DOCUMENT 2020 01 INTERNAL CONTROL AND RISK MANAGEMENT GROUPE RENAULT GROUPE RENAULT: A COMPANY THAT ACTS RESPONSIBLY CORPORATE GOVERNANCE FINANCIAL STATEMENTS RENAULT AND ITS SHAREHOLDERS ANNUAL GENERAL MEETING OF RENAULT ON APRIL 23, 2021 ADDITIONAL INFORMATION Groupe Renault risk factors 1.5.2 Groupe Renault identifies risk factors to which it is exposed using its formal risk management approach. You are reminded that the Group comprises the following operating divisions: Automotive excluding AVTOVAZ, which includes Groupe Renault's automotive activities (hereafter known as “Automotive”), AVTOVAZ, which includes the AVTOVAZ group and its parent company, Alliance Rostec Auto B.V., Sales Financing (the RCI Banque group and its subsidiaries), and Mobility Services, which brings together new mobility service activities under the Renault M.A.I. holding company. Each of these has its own risk management system, which is used to keep the risks related to its activities under control. These systems are described in section 1.5.1. The Risk Management department carries out a summary to obtain an overview of the risks to which Groupe Renault is exposed. For AVTOVAZ, the risk management system is unique, based on methodologies that are widely shared with Groupe Renault with a view to gradual harmonization and increasing maturity. This identification of risks is based on assessments of residual impact and probability of occurrence (after taking into account the management plans), the product of these two terms defining criticality. For risk factors whose criticality for the Group is high, we specify which factor is decisive in this criticality (e.g. "impact > probability") or whether the impact and probability contribute evenly ("impact = probability"). Risk factors presented in this section are those identified by the Group as significant factors that could, at the horizon of its medium-term strategic plan, have a negative impact on its image, its assets, the conduct of its activities and the achievement of its objectives, and whose criticality is rated at the highest levels on the Group’s risk scale. The risks presented in chapter 2.1.6 “Extra-financial performance” of this Document, have been included in this analysis. Depending on their materiality, they fed into the description of certain risk factors. This is the case, for example, with risks related to global warming, the protection of personal data or supplier relations. It cannot however be ruled out that other risk factors currently considered insignificant or not identified could in the future adversely affect the Group. Potential evolutions in the mid-term strategic plan of the Group may also induce changes in the nature or relative weight of risk factors. It should actually be noted that the major risk mapping is updated every year, in close collaboration with the preparatory work and implementation of the strategic plan, so that the plan integrates the appropriate action plans designed to respond to the operational or strategic risks identified. The major risk factors resulting from the Group’s analysis for all of its operating segments are summarized in the following table and presented below. In each of the five categories, risk factors with the higher criticality levels are described at the beginning. RISK FACTORS FOR GROUPE RENAULT Legal risks MEDIUM STRATEGY OPERATIONS PRODUCTS AND SERVICES CROSS-GROUP RISKS FINANCIAL RISKS HIGH CRITICALITY LEVEL Risk of insufficient performance of the Alliance Risk of insufficient response to disruption of existing activities Risk of natural, health or industrial disasters Risks related to geopolitical instability and economic conditions Risk of insufficient capacity to restore margins Risk of supply chain interruption Risk of natural, health or industrial disasters Risk of inadequate product and service definition or execution Risk of inadequate innovation in relation to market expectations Risk of product or service quality defects Risk of insufficient reinforcement of the Renault brand Risk of inadequate innovation in relation to market expectations Risk of non-compliance with laws and regulations Liquidity risk Foreign exchange risk Customer and network credit risk Bank counterparty risk Interest rate risk Risk of decrease of residual value In the following descriptions, this logo identifies the risk factors on which global warming has a significant impact (see chapter “Extra-Financial Performance Declaration” of this Document for more details).