Financial Statements and Management Report - Thyssenkrupp

1.6 Management report Expected developments and associated opportunities and risks
Based on model calculations, we will face substantial costs for emission allowances in the third trading
period of the EU Emissions Trading Scheme from 2013 to 2020. As an energy-intensive industrial and
services group we face earnings risks if we are unable in the competitive international market to pass on to
our customers all or any of the additional costs. ThyssenKrupp participates both directly and via industry
associations in the discussion process on politically desired energy price surcharges.
Environmental risks
Due to the production processes in our industrial plants, we are exposed to process-related risks that can
lead to air and water pollution. ThyssenKrupp continuously invests in sustainable environmental protection
in our production operations so as to conserve resources and minimize environmental impact over the long
term. Many Group companies have established certified environmental management systems which reduce
the risk of environmental damage.
Some of our real estate no longer used for operations is subject to risks from past pollution and mining
subsidence which we contain with preventive measures and scheduled remediation work. Our real estate
area recognizes adequate provisions for this every fiscal year.
Risks associated with information security
We continually review our information technologies to ensure the secure handling of IT-based business
processes and reduce risks. If necessary, the systems are updated and protected even more effectively.
Further, measures are in place to maximize information security awareness and provide the necessary
technical support for all employees. The IT-based integration of business processes is subject to the
condition that the risks involved for our Group companies and business partners are minimized. In the
reporting year we therefore again carried out extensive measures to further improve our security standards
and our information security management system.
Various business processes and data centers attained security certification which documents the standard
achieved for our customers. In the new ThyssenKrupp Quarter in Essen we raised the standard of security
significantly: By incorporating state-of-the-art technologies from the planning stage we were able to achieve
an appropriate level of protection. Regular tests are carried out – in some cases with external support – to
check whether our IT infrastructure is vulnerable to hacking. If necessary increased protection is introduced
immediately. In addition we have established a Groupwide program to guarantee segregation of duties in
ERP (Enterprise Resource Planning) systems in accordance with the principle of dual control. This minimizes
risks for numerous business processes at authorization level.
Together with the Group’s data protection officer, our experts ensure that personal data are processed only
in accordance with the rules of the German Data Protection Act. All these measures allow us to continue to
protect the Group’s business data as well as the privacy of our business associates and employees through
preventive action and to respond appropriately to potential new risks.
Risks associated with pensions and healthcare obligations
The fund assets used to finance pension liabilities are exposed to capital market risks. To minimize these
risks, the individual investment forms are selected and weighted on the basis of studies by independent
experts. The aim is to adjust the investments to ensure that the associated pension liabilities are
permanently fulfilled in respect of the current and future income from the investments. Pension obligations
are subject to risks from increased life expectancies of beneficiaries and from obligations to adjust pension
amounts on a regular basis. In addition, the cost of healthcare obligations in the USA may increase.
Furthermore, in some countries there is a risk of significantly higher payments having to be made to finance
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