Brembo adopts an Integrated Risk Management approach, embedding risk assessment into strategy, operations and governance, and ensuring that all organizational levels act in line with the Group’s corporate risk approach.
This holistic framework strengthens business resilience, enabling Brembo to proactively address challenges, respond to external volatility and seize opportunities arising from external and internal context evolution.
Brembo’s Internal Control and Risk Management System ensures effective oversight of risks through clearly defined roles, responsibilities and coordination mechanisms across the organization.
The system involves the Administrative Bodies (Board of Directors, Audit, Risk and Sustainability Committee, Executive Directors), External Auditors, Supervisory Committee, Internal Audit GCF, Sustainability & Risk GCF, and other roles and functions with tasks related to internal control and risk management. The Management is responsible for the operational implementation within their respective areas.
Continuous information flows and periodic reporting support transparency, accountability and a strong risk culture throughout the Group.
The Group has formalized its approach to risk taking through a Risk Appetite Framework (RAF), which defines the level of risk Brembo is willing to accept in pursuing its strategic objectives.
The RAF further enhances the Company’s Internal Control and Risk Management System by formalising a methodology for assessing, articulating, and monitoring risk thresholds in line with Brembo’s strategic objectives.
The risk categories identified within Brembo’s RAF have been assigned one of the following four levels of risk appetite:
- Zero Tolerance Vision: Brembo does everything possible to avoid risks by adopting rigorous measures to prevent violations;
- Low Appetite: the Group tolerates low risks in areas where negative impacts outweigh benefits;
- Medium Appetite: Brembo accepts medium risks to seize significant opportunities, carefully balancing risks and rewards;
- High Appetite: the Group tolerates high risks to pursue ambitious goals and achieve potentially high benefits.
Brembo's RAF defines the organization's risk appetite across multiple categories, ensuring alignment with its established risk model. Each year, as part of the ERM risk assessment process, the mapped risk events are formally evaluated against their respective risk appetites.
Brembo has implemented a Risk Management framework within its Internal Control and Risk Management System that outlines the procedures and the responsibilities to be followed by corporate functions and business units to identify, assess, manage, and monitor risks.
Brembo’s risk management framework is based on 2 pillars:
- ERM framework, that is organized into three main macro-processes:
- Assessment and management of the risks of organizational areas ('bottom-up' process);
- Assessment and management of the main corporate risks ('top-down' process);
- Assessment of risks and opportunities linked to the Strategic Plan.
- Project Risk Management process, to identify and manage risks before and during project execution.
The Group is exposed to the consequences of both volatility in external factors, and internal risks associated to business operations and processes. The main risks that the Group may face are classified according to the following categories:
Strategic Risks
Brembo, as other peer companies, is exposed to a range of strategic risks arising from geopolitical and macroeconomic instability, technological innovation, structural changes in the automotive industry, climate change and investment activities. Ongoing geopolitical tensions, trade barriers and macroeconomic volatility may affect supply chains, demand and asset values. These risks are partially offset through geographical diversification, a local‑for‑local approach and proactive monitoring supported by contingency planning and crisis management. Competitive and technological risks are addressed through continuous investment in R&D, product and process innovation, and strong protection of intellectual property. Climate‑related risks and opportunities are actively managed through a Climate Change Risk Assessment, covering physical and transition risks across operations and selected suppliers.
Operational Risks
Brembo is exposed to a range of operational risks inherent to its industrial activities, including supply chain, business continuity, product quality, information technology, artificial intelligence, environment, health and safety, and people management. These risks are addressed through specific processes and preventive measures ensuring operational reliability, compliance with stakeholders requirements across the value chain and the protection of people, assets and performance.
Legal and Compliance Risks
Brembo, as other peer companies, is exposed to legal and compliance risks arising from the increasing complexity and rapid evolution of laws and regulations across the markets in which it operates. These risks include – for example - litigation and contractual disputes, personal data protection, counterfeiting, tax compliance, IT and artificial intelligence regulations, etc.. Brembo manages such risks through dedicated governance, policies and control frameworks aimed at supporting adherence to applicable laws, regulations and ethical standards.
Financial and Reporting Risks
Among financial risks, we mention those related to interest and exchange rate volatility, liquidity, credit exposure, raw materials and commodity price fluctuations which may affect cash flow, margins and financial position. In addition, as a listed company, the Group also faces risks linked to the accuracy, consistency and reliability of financial and sustainability reporting, including fraud and misstatements. To assess and address financial risks the Group runs sensitivity and loss scenario analysis. Certain exposures are naturally hedged through the Group’s local-for-local approach while for certain risks specific hedging tools.
For an in-depth focus on Group risks, please refer to the Annual Report.
Brembo has established a structured Crisis Management framework aimed at ensuring timely decision making and effective coordination in the event of extraordinary or disruptive events.
In the presence of significant risk escalation, such as geopolitical events, supply chain disruptions or major incidents, a dedicated governance structure is activated to assess impacts and define appropriate response actions.
This framework supports business continuity, allows a better protection of people and assets, and safeguards the Group’s operational and reputational integrity.