Risk management system

Risk management and internal control system

In managing its risks the Company is guided by sustainability principles to prevent negative events and/or minimise their impact on financial performance as well as its social and environmental activities based on relevant goals and objectives. Thanks to such approach our risk management and internal control system (“RMICS”) provides reasonable assurance that the Company will achieve its goals while balancing costs and benefits, and ensures its sustainable development.

Risk management process

The overall coordination and methodological support of RMICS risk management process at Russian Railways are led by the Risk Management and Internal Control Centre.

Risk management process is governed by internal regulatory documents of the Company.

As part of risk management and internal control, the Company generates risk reports containing information on risks, mitigation plans and RMICS performance. The reports are subject to review and approval by executive bodies, the Board of Directors and its Audit and Risk Committee. The Board also sets the risk appetite, among other things, for sustainable development areas such as:

• procurement from small and medium-sized businesses;
• health, safety and environment;
• industrial and fire safety;
• traffic safety;
• information security;
• anti-corruption;
• finance and social policy.

As risk management and internal control are ongoing and integrated into business processes, information exchange, consultations, vertical and horizontal interaction of participants are not limited by reporting periods.

We keep improving our risk management in line with current limitations and trends, which is confirmed by internal audit, among other things.

In particular, when identifying and assessing risks and designing response measures, we pay increasing attention to achieving sustainable development goals based on ESG criteria and the approved risk level.

Sustainability risks

As a leader of the global railway transportation market and one of Russia’s backbone local players, Russian Railways helps achieve important social and economic goals and ensure transport accessibility of cities and regions. Being a major taxpayer we place special emphasis on the professional development and safety of our employees.

We take into account all stakeholder interests, analyse risks, monitor and adopt global trends, and take stronger effort towards sustainability. This helps us identify growth points and take advantage of new opportunities while striking a balance between such opportunities and related risks.

Information on sustainability risk management is available in the respective sections of the report: