Risks

Last updated: March 3, 2026

Risk management

Risk management at Huhtamaki aims to identify potential events that may affect the achievement of Huhtamaki’s objectives as outlined in its 2030 Strategy. Its purpose is to manage risks to a level that the Group is capable and prepared to accept, so that there is reasonable assurance and predictability regarding the achievement of the Group’s objectives. The aim is also to enable efficient allocation of resources and risk management efforts.

The Group Enterprise Risk Management (ERM) Policy defines the objectives, scope and responsibilities of risk management. Efficient risk management ensures timely identification and assessment of opportunities and risks in the short, medium, and long term, as well as relevant measures to manage them. Detailed risk management procedures are described in the Group’s ERM framework and process guidelines. The overall risk management process of the Group follows the principles of the Enterprise Risk Management (ERM) framework of Committee of Sponsoring Organizations of the Treadway Commission (COSO), and ISO 31000 Risk Management Standard. Further, Huhtamaki has tailored its ERM processes to meet its own needs.

To systematize and facilitate the identification of risks, they are categorized as strategic, operational and financial risks. These categories are closely aligned with the objectives of Huhtamaki, with sustainability and compliance embedded in all of them. Huhtamaki assesses risks in terms of their impact and the likelihood of their occurrence. A risk impact is considered in terms of impact on the organization’s annual EBIT. The likelihood of a risk occurring is generally considered in terms of the expected frequency of occurrence. To further evaluate the residual risk level when risk controls are in place, Huhtamaki assesses the effectiveness of those controls over the impact and likelihood of the risk.

Enterprise Risk Management is supported by several specific risk assessments, including Double Materiality Assessment (DMA), Climate Change scenario analysis, and a property risk control program. These assessments help identify and manage various risks across the organization.

Risk review process 2025

In 2025, businesses and Group functions identified and assessed strategic, operational and financial risks and opportunities against the impact on the achievement of the strategic priorities and performance objectives. These risk assessment results were consolidated to the Group level. Risk treatment actions were defined to reach acceptable risk levels at each stage.

The acceptable risk levels associated with appropriate risk management efforts were first evaluated by the Global Executive Team, then reviewed by the Audit Committee of the Board of Directors and finally approved by the Board of Directors. Agreed risk management efforts will be conducted and monitored during 2026.

During 2025, the key risks identified in the 2024 risk assessment process were monitored to assess their existing and newly implemented controls and any changes in the risk level itself. Actions to manage those risks were planned and executed at the Group and segment level. Global Risk Management function facilitated risk surveys for business segments and group functions to follow the changes in the risk sentiment.

Most significant strategic risks 

Macro level uncertainties include geopolitical risks, macroeconomic risks and recession risks. Ongoing wars and conflicts, such as in Ukraine and Middle East region may expand and new conflicts may arise. Unstable political conditions and geopolitical instability increase the uncertainties in global trade and worsen business conditions. Further, tariffs and other trade barriers may slow down investments and economic growth in impacted geographies. Hyperinflation and high interest rates and high volatility in exchange rates could worsen the business conditions some market areas. Economic downturns affect customer and consumer behavior and purchasing power. Huhtamaki is actively monitoring the developments so that it can react to changes relevant in its business environment.

Changes in competitive landscape, in consumer and customer preferences as well as in technologies and materials present major opportunities but also risks for Huhtamaki. Product commoditization may accelerate and lead to intensified price competition. Low-cost imports and market consolidation may also affect competition.

Large customers offer growth opportunities, but dependence on large customers may also present a risk in case significant portion of revenue comes from a small number of customers. Losing a large customer could affect also capacity utilization.

Understanding consumers enables Huhtamaki to realize business opportunities in building long-term sustainable growth in partnership with its customers. Activities to manage the threats and seize the opportunities involve active dialogue with the customers to develop ways to increase value and understand Huhtamaki´s competitive position, comprehensive commercial excellence program as well as cross-functional and cross-segment collaboration at Huhtamaki.

Changes in the business environment driven by regulation and sustainability present significant risks and opportunities. The company’s future growth and success depend on its continued ability to predict and respond to changes and its ability to innovate and develop new sustainable products and solutions in a timely manner. Regulatory changes may introduce material bans and other packaging related regulations, including those related to recyclability, recycled content requirements, single-use plastics, compostability, supply chain management and extended producer responsibility impacting packaging industry. Further, these regulatory changes include a level of unpredictability, especially in certain geographics. To mitigate the threats, Huhtamaki is investing in new innovative and sustainable solutions. Huhtamaki is also focused on driving an evidence-based discussion to deliver data on the value of packaging in terms of hygiene, food safety, food availability and food waste prevention. Furthermore, Huhtamaki actively tracks early stages of regulatory initiatives and potential regulatory changes to reflect these changes in the development and commercialization of its products and solutions. Lack of consistent enforcement of new regulations, possible deregulation and major delays in customers’ sustainability commitments increase uncertainty and risks related to investments in new innovations. Wrong timing of investments may compromise investment payback time.

Adequate investments in research and development (R&D) are needed to meet the future customer and consumer needs. Protection of intellectual property is an essential part of R&D. Huhtamaki is also actively screening for strategic partnerships and merger and acquisition (M&A) opportunities to secure a competitive advantage on new technology innovations.

There are risks and opportunities related to the ability to manage prices so that price changes are implemented in a timely manner and with correct cost and market intelligence data. This includes the ability to pass price increases of raw materials, energy and transportation to the price of the products. Risk management actions include ongoing monitoring of raw material and energy costs, securing cost competitiveness and focus on contract management with energy and material escalation clauses included in customer contracts when possible.

Most significant operational risks

To mitigate the risk of its’ technology and machinery becoming obsolete, inefficient or unfit for serving customer demand, the Group continuously monitors and anticipates long-term needs and invests in new technology.

Risks related to information security, IT infrastructure and applications are operational risks potentially impacting the business continuity and operational effectiveness. Risks related to inefficient business processes may weaken competitiveness. Huhtamaki is continuously developing its IT environment including ERP systems and processes, to enhance productivity and mitigate cyber and other business interruption risks.

In terms of human resources, the key risks and opportunities are identified to arise from availability and cost of labor and talent. The risk mitigation actions include consistent development of employee experience including employee promise, hiring practices, onboarding, talent and leadership development and succession planning.

Major fires or disruption in supply chain may cause business interruptions. In addition, Climate change affects the frequency of natural hazards, such as floods and storms. natural hazards, The company implements a continuous improvement program in property risk management, designed to reduce the impact and likelihood of hazards, such as fire, explosion, flood or storm. Huhtamaki also develops its disaster recovery and business continuity plans and allocates manufacturing capacity to several locations to minimize the impact of a potential business interruption.

Risk related to non-compliance with laws and sanctions include risk of penalties or claims for compensation, or indictment due to a failure to comply with applicable legislation such as anti-bribery, competition, product, environmental or other legislation or applicable sanctions. Key risk management actions include policies and processes to identify and mitigate the non-compliances, and training on various compliance topics.

None of the key risks identified in connection with the 2025 risk assessment is considered of a magnitude that could not be managed or would endanger the implementation of Huhtamaki’s 2030 Strategy. When considered necessary, appropriate risk treatment actions may also involve risk transfer by means of insurance. The Group maintains several global insurance programs. The need for insurance, including the adequacy of its scope and limits, is continuously evaluated by the Global Risk Management function..