The Lufthansa Group defines opportunities and risks as the possible positive or negative deviations from a forecast figure or a defined objective for potential future developments or events.
Risk management at the Lufthansa Group aims to fully identify material risks, to present and compare them transparently and to assess and manage them. Risk owners are obliged to monitor and manage risks proactively and to include relevant information in the planning, steering and control processes. The Group guidelines on risk management adopted by the Executive Board define all the binding methodological and organizational standards for dealing with opportunities and risks.
The risk management process in the Lufthansa Group is monitored by an internal control system (ICS). This entails systematically reviewing the effectiveness of control measures for substantial risks as part of the Lufthansa Group’s ICS. The relevant risks are selected annually.
When the CSR Directive Implementation Act (CSR-RUG) came into effect in April 2017, the Lufthansa Group’s risk management was expanded to cover aspects relevant to CSR (environmental, employee and social concerns, as well as human rights, anti-corruption measures, bribery and the supply chain) and their risks for external stakeholders. The risk management methodology remained unchanged, however. Risks are reported in the non-financial report in line with CSR RUG if they would have a severely adverse impact on the Company and their occurrence is highly likely. The Act was revised in 2018. As in the previous year there were no CSR risks that required reporting.
Further information regarding risk management system can be found here.