We implemented an integrated Enterprise Risk Management Model (ERM) to assess risks

Risk assessment is considered as being the basic element of the internal control and risk management system. IGD, with this in mind and in order to be equipped with tools that are more in line with the control and risk management needs required by its organisational complexity, status as listed company and business dynamics, defined and implemented an integrated risk management process, based on the internationally recognised standards in the field of Enterprise Risk Management (“ERM”). In line with the reference methodological standards, risk assessment is portrayed by means of four sub elements:

  • Definition of appropriate objectives

The Company verifies that the planning, implementation and monitoring activities of the internal control and risk management system are continuously in line with the Company’s strategic, financial, operational and compliance objectives.

  • Identification and assessment of risks

The Risk Management Model adopted calls for the model itself to be continuously updated and developed by the Management, in order to ensure that it is in line with organisational and business evolution.

This activity, carried out in relation to the Enterprise Risk Management process, is supplemented by specific risk assessments which are carried out as part of specific control systems (internal auditing, control system on administrative-accounting procedures  ex. L. 262/05).

  • Identification and assessment of fraud risks

The defined ERM model identifies and assesses, in its Risk Map, a risk area referring to  “Fraud committed by Company personnel or by its stakeholders with effects on its assets and on its reputation”. The control measures defined, in particular with regard to administrative-accounting areas, finance and treasury management area and commercial and asset management, also take into account aspects regarding fraud risks.

  • Identification and analysis of important changes

As part of the defined internal control and risk management system, checks and updates regarding risk analysis and assessment are periodically planned and carried out, taking into account the strategies pursued and the organisational and business model adopted. Therefore, the Company promotes and carries out periodic activities to update its risk identification and assessment models (ERM system, Organisational, Management and Control Model ex Legislative Decree 231/01, administrative-accounting control system ex. L. 262/05) and to verify their consistency with its specific organisational and business features and with its corporate strategies.


The various corporate risks are assessed by IGD with respect to its strategic, operational, financial and compliance objectives, and the trend of these risks is monitored through a model based on Key Risk Indicators, which support management in the dynamic assessment of the level of exposure.

The main risks to which IGD SIIQ S.p.A. and the Group are exposed

The main risks we face and manage in carrying out our activities can be traced back to 4 areas:

Risk – global pandemics

Risk factors:

  • Lower revenue
  • Impact on the workforce
  • Administrative decisions and/or operating restrictions
  • Temporary closures of locations
  • Inability of tenants to carry out retail operations and to remain solvent


Risk – changes in purchasing power (inflation, decreased consumption, etc.) and competition

Risk factors:

  • Radical change in the end customer’s consumer habits, which could have an impact on IGD’s business linked to the shopping center model;
  • Regulatory changes which could strongly impact the company’s activities and negatively impact the Group’s revenue and the value of its assets.


Risk – changes in the global market/socio-political/regulatory environment

Risk factors:

  • strong inflationary pressure;
  • general national/international economic crisis;
  • regulatory changes which have a strong impact on the regulations that the Company must comply with.


Risk – failure to manage the impact that the penetration of e-commerce has on the business

Risk factors:

  • Radical change in the consumer habits of the final costumer with a growing preference to make purchases online which impacts IGD’s business tied to the shopping center model.


Risk – relating to financial strategy and debt refinancing

Risk factors:

  • Failed/ unclear identification of the Company’s financial strategy resulting in delays in debt refinancing which could affect the ability to access the best sources of funding and maintain an investment grade rating.


Risk – Strategy and composition of the tenant mix / merchandising mix

Risk factors:

  • The shopping centers’ positioning fails to attract the target customers found in the catchment area;
  • Merchandising mix does not meet the needs of the customers in the catchment area;
  • Tenant mix does not meet the needs of the customers in the catchment area.


Risk – crisis of medium/large spaces (retail and hypermarkets)

Risk factors:

  • Crisis of hypermarket retailers which could affect occupancy of large areas in shopping centers and their appeal, along with the Company’s revenue;
  • Crisis of large retail tenants which could affect occupancy of large areas in shopping centers and the Company’s revenues.


Risk – Corporate Social Responsibility

Risk factors:

  • Damaged reputation;
  • Delays in development;
  • Weakened customer relations;
  • Erosion of shareholder value.

For more information please see the Sustainability Risks page

Risks – natural disasters (earthquakes, floods) and damages caused by third parties

Risk factors:

  • Natural disasters (for example, floods, earthquakes, etc.);
  • Catastrophic events (for example, fires);
  • Damages caused by third parties;
  • Damages incurred by third parties in the course of business or related activities; which could impact the value of the Group’s assets or cash flow.


Credit risk

Risk factors:

  • Client default;
  • Default of consortia tenants;
  • Credit recovery problems.


Asset valuation risk

Risk factors:

  • Global economic crisis;
  • External events;
  • Changes in the domestic/international market which results in a significant devaluation of the asset portfolio.


Contract risk

Risk factors:

  • Problems managing the contractual relationship with tenants;
  • Increased costs or loss of income.


Vacancy risk

Risk factors:

  • Failure to reach the level of occupancy expected at the shopping centers which could impact appeal and profitability.


Information technology risk

Risk factors:

  • Problems stemming from the correct functioning of the IT systems supporting the company’s operations

Fiscal risk

Risk factors:

  • Application of sanctions linked to violations of tax regulations,
  • Failure to meet the profit and asset requisites necessary to be eligible for SIIQ status, resulting in being ineligible for treatment under the SIIQ regime (in the event this situation is prolonged for the period provided for at law).


Risk – related to privacy violations

Risk factors:

  • Application of sanctions linked to violations of regulations protecting data and privacy.


Liability pursuant to Legislative Decree 231/01

Risk factors:

  • Sanctions associated with corporate liability for crimes committed pursuant to Legislative Decree 231/01.


Regulatory risk associated with being a listed company (Consob, Borsa)

Risk factors:

  • Sanctions, reprimands and citations for violations of the regulations issued by the stock exchange and regulatory agencies relating to the Company’s responsibility as an issuer of financial instruments traded on a regulated market.


Liability pursuant to Law 262/05

Risk factors:

  • Sanctions associated with violations of the Financial Reporting Officer’s responsibilities pursuant to Law 262/05.

Risks associated with funding and cash management 

Risk factors:

  • Problems managing liquidity;
  • Financial resources fail to meet the company’s needs;
  • Problems maintaining existing loans and in obtaining new ones.


Interest rate risk

Risk factors:

  • volatile interest rates which could impact the financing of operations, as well as the use of available liquidity.


Foreign exchange risk

Risk factors:

  • fluctuations in the Romanian currency, RON; which could result in the portfolio being written down and the default of Romanian retailers whose contracts are in Euro, but anchored to the RON.