Glencore (GLNCY) Risk Analysis

Risk movement in 2021 - Stable Risk appetite - Low. Our industrial activities are subject to a level of significant residual risk throughout each operation's life cycle, from initiation through development, operation and/or expansion and ultimate closure. Description and potential impact - Notwithstanding our enterprise risk management practices, some of these risks are beyond our control. These include a level of geological risk relating to factors such as structure and grade as well as geotechnical and hydrological risks, natural hazards, processing problems, technical malfunctions, unavailability of materials and equipment, unreliability and/or constraints of infrastructure, industrial accidents, labour force challenges, disasters, protests, force majeure factors, cost overruns, delays in permitting or other regulatory matters, vandalism and crime. The maintenance of positive employee and union relations and engagement, and the ability to attract and retain skilled workers, including senior management, are key to our success. This attraction and retention of highly qualified and skilled personnel can be challenging, especially in locations experiencing political or civil unrest, or in which employees may be exposed to other hazardous conditions. Many employees, especially at the Group's industrial activities, are represented by labour unions under various collective labour agreements. Their employing company may not be able to satisfactorily renegotiate its collective labour agreements when they expire and may face tougher negotiations or higher wage demands than would be the case for non-unionised labour. In addition, existing labour agreements may not prevent a strike or work stoppage. The development and operating of assets may lead to future upward revisions in estimated costs, delays or other operational difficulties or damage to properties or facilities. This may cause production to be reduced or to cease and may further result in personal injury or death, third party damage or loss or require greater infrastructure spending. Also, the realisation of these risks could require significant additional capital and operating expenditures. Some of the Group's interests in industrial assets do not constitute controlling stakes. Although the Group has various agreements in place which seek to protect its position where it does not exercise control, the other shareholders in these entities may have interests or goals that are inconsistent with ours and may take action contrary to the Group's interests or be unable or unwilling to fulfil their obligations. Severe operating or market difficulties may result in impairments, details of which are recorded in note 7. Developments - Businesses continued to be affected by the Covid-19 pandemic. The response to the pandemic has varied by jurisdiction, with authorities imposing different requirements, often changing as the pandemic evolves. Operations sought to develop protocols/ working practices to minimise virus transmission risks in the workplace. Some businesses continued to be affected as a result of new outbreaks which led to challenges such as the inability to mobilise skilled resources when required. Glencore's Nickel operations in New Caledonia continued to face particular operating challenges; in 2021 there was a significantly extended shutdown on a furnace because of the pandemic leading to an extended run time on the other furnace resulting in difficulties being experienced with this furnace. We continue to experience challenges with this complex operation. Following a detailed business review, Glencore disposed of its majority stake in Mopani in Zambia. The structure of the transaction should result in some recovery of the residual economic value in the asset whilst reducing operating and country risks that had proven to be challenging. Cost control remains a significant area of management focus, noting that in the context of mineral resources, absolute costs tend to increase over time as incremental resources are likely further away from the processing plant and/or deeper with sometimes decreasing grades. A number of operations have adopted structured programmes to analyse their costs and identify marginal savings which are then implemented. Maintenance and, where possible, reduction of unit costs is regularly reviewed by management. Infrastructure availability remains a key risk. Exposures continue to include the delivery of reliable electrical power to our DRC operations. This has improved over the last several years but is not yet at a consistent level of reliability, and management continues to work with local entities to improve the service. Our South African operations have been significantly adversely affected by local rail and power issues. Our Astron Energy refinery continues to carry out repairs to the refinery following the 2020 explosion which tragically also resulted in the loss of two lives. Improved governance and operating management systems are being developed and implemented to address the underlying issues that led to the incident. Despite the challenges created by the global pandemic, we have maintained engagement campaigns with employees to receive direct feedback on the Group's culture and practices. Mitigating factors - Development and operating risks and hazards are managed through our continuous project status evaluation and reporting processes and ongoing assessment, reporting and communication of the risks that affect our operations along with updates to the risk register. We publish our production results quarterly and our assessment of reserves and resources based on available drilling and other data sources annually. Conversion of resources to reserves and, eventually, reserves to production is an ongoing process that takes into account technical and operational factors, economics of the particular commodities concerned and the impact on the communities in which we operate. Local cost control measures are complemented by global procurement that leverages our scale to seek to achieve favourable terms on high-consumption materials such as fuel, explosives, and tyres. One of the key factors in our success is a good and trustworthy relationship with our people. This priority is reflected in the principles of our sustainability programme and related guidance, which require regular, open, fair, and respectful communication, zero tolerance for human rights violations, fair remuneration and, above all, a safe working environment as outlined in the Our people section on page 34 and our website at: glencore.com/careers/our-culture.

Risk movement in 2021 - Decrease Risk appetite - Low. We are subject to non-performance risk by our suppliers, customers, and hedging counterparties, in particular via our marketing activities. Description and potential impact - Financial assets consisting principally of receivables and advances, derivative instruments and long-term advances and loans can expose us to concentrations of credit risk. Non-performance by suppliers, customers and hedging counterparties may occur and cause losses in a range of situations, such as: · a significant increase in commodity prices resulting in suppliers being unwilling to honour their contractual commitments to sell commodities at pre-agreed prices · a significant reduction in commodity prices resulting in customers being unwilling or unable to honour their contractual commitments to purchase commodities at pre-agreed prices · suppliers subject to prepayment may find themselves unable to honour their contractual obligations due to financial distress or other reasons Open account risk is taken but this is governed by the Group-wide Corporate Credit Risk Management procedure for higher levels of credit risk exposure, with an established threshold for referral of credit decisions by department heads to the CEO, CFO and CRO, relating to unsecured amounts in excess of $75 million with BBB- or lower rated counterparts. Developments - Some of our customers and suppliers are experiencing financial difficulties particularly arising from Covid-19 or the recent material price volatility in some commodity markets. However, the overall credit quality of our counterparty portfolio significantly improved in 2021 as global economic growth improved, Covid-19 restrictions eased and, in particular, energy prices rebounded strongly. We have regular contact with our key counterparties and, in the vast majority of cases, deliveries and payments have continued in the normal course of business. The Group's accounts receivable balance, including assessment of doubtful accounts, is set out in note 14. Mitigating factors - We seek to diversify our counterparties and to ensure adherence to open account limits. The Group makes extensive use of credit enhancement tools, seeking letters of credit, insurance cover, discounting, and other means of reducing credit risk with counterparts. Where desirable and possible, credit exposures are to be covered through credit mitigation products. We monitor the credit quality of our physical and hedge counterparties and seek to reduce the risk of customer default or non- performance by requiring credit support from creditworthy financial institutions. Specific credit risk rules apply to open account risk with an established threshold for referral of credit positions by departments to central management.

Risk movement in 2021 - Stable Risk appetite - Medium. Some of our existing industrial and marketing activities are located in countries that are categorised as developing or as having challenging political or social climates or where the legal system is uncertain, and/or where corruption is generally understood to exist, and therefore there will always be residual risk in relation to our compliance with laws and external requirements. Description and potential impact - We are exposed to extensive laws, including those relating to bribery and corruption, sanctions, taxation, anti-trust, financial markets regulation and rules, environmental protection, use of hazardous substances, product safety and dangerous goods regulations, development of natural resources, licences over resources, exploration, production and post-closure reclamation, employment of labour and occupational health and safety standards. The legal system and dispute resolution mechanisms in some countries in which we operate may be uncertain, meaning that we may be unable to enforce our understanding of our rights and obligations under these laws. The costs associated with compliance with these laws and regulations, including the costs of regulatory permits, are substantial and increasing. Any changes to these laws or their more stringent enforcement or restrictive interpretation could cause additional significant expenditure to be incurred and/or cause suspensions of operations and delays in the development of industrial assets. Failure to obtain or renew a necessary permit or the occurrence of other disputes could mean that we would be unable to proceed with the development or continued operation of an industrial asset and/or impede our ability to develop new industrial assets. As a diversified sourcing, marketing and distribution company conducting complex transactions globally, we are particularly exposed to the risks of fraud, corruption, sanctions, and other unlawful activities both internally and externally. Our marketing activities are large in scale, which may make fraudulent, corrupt, or other unlawful transactions difficult to detect. In addition, some of our industrial activities are located in countries where corruption is more prevalent; and some of our counterparties have in the past, and may in the future, become the targets of sanctions. Corruption and sanctions risks remain highly relevant for businesses operating in international markets, as shown by recent enforcement actions both inside and outside the resources sector. Governmental and other authorities have commenced, and may in the future commence, investigations against the Group (including those listed in note 23 to the financial statements) in relation to alleged non-compliance with these laws, and/or may bring proceedings against the Group in relation to alleged non-compliance. The cost of cooperating with investigations and/or defending proceedings can be substantial. Investigations or proceedings could lead to reputational damage, the imposition of material fines, penalties, redress or other restitution requirements, or other civil or criminal sanctions on the Group (and/or on individual employees of the Group), the curtailment or cessation of operations, orders to pay compensation, orders to remedy the effects of violations and/or orders to take preventative steps against possible future violations. The impact of any monetary fines, penalties, redress or other restitution requirements, and the reputational damage that could be associated with them as a result of proceedings that are decided adversely to the Group, could be material. In addition, the Group may be the subject of legal claims brought by private parties in connection with alleged non-compliance with these laws, including class or collective action suits in connection with governmental and other investigations and proceedings, and lawsuits based upon damage resulting from our operations. Any successful claims brought against the Group could result in material damages being awarded against the Group, the cessation of operations, compensation and remedial and/or preventative orders. Developments - The Group has been cooperating extensively with the relevant authorities in order to resolve as expeditiously as possible the government investigations disclosed in note 23 to the financial statements. The Investigations Committee ('Committee') of the Board manages the Group's responses to these investigations. While the Committee cannot forecast with certainty the cost, extent, timing or terms of the outcomes of the investigations, the Committee presently expects to resolve the US, UK and Brazilian investigations in 2022. Accordingly, and based on the Company's current information and understanding, the Group has raised a provision as at 31 December 2021 in the amount of $1.5 billion representing the Committee's current best estimate of the costs to resolve these investigations (included in other expenses, see note 5). Glencore continues to cooperate with a previously disclosed investigation by the Office of the Attorney General of Switzerland (OAG) into Glencore International AG for failure to have the organisational measures in place to prevent alleged corruption. The timing and outcome of this investigation remain uncertain. Glencore has also been notified by the Dutch authorities of a criminal investigation into Glencore International AG related to potential corruption pertaining to the DRC and is in contact with the Dutch authorities in respect of this investigation. The scope of the investigation is similar to that of the OAG investigation. The Dutch authorities are coordinating their investigation with the OAG and we would expect any possible resolution to avoid duplicative penalties for the same conduct. Mitigating factors - We seek to ensure compliance through our commitment to complying with or exceeding the laws and regulations applicable to our operations and products and through monitoring of legislative requirements, engagement with government and regulators, and compliance with the terms of permits and licences. We seek to mitigate the risk of breaching applicable laws and external requirements through our risk management framework. We have implemented a Group Ethics and Compliance programme that includes risk assessments, a range of policies, standards, procedures, guidelines, training and awareness, monitoring and investigations. See also the Ethics and Compliance section of this report on page 43. We have increased in recent years our focus on, and resources dedicated to, the Group Ethics and Compliance programme, including through increasing the number of dedicated compliance professionals, enhancing our compliance policies and procedures and controls, increasing our training and awareness activities and strengthening the Group's Raising Concerns programme and investigations function. We engage with reputable external legal firms and consultants as necessary to support these efforts. However, there can be no assurance that such policies, standards, procedures, and controls will adequately protect the Group against fraud, bribery and corruption, market abuse, sanctions breaches or other unlawful activities.

Risk movement in 2021 - Stable Risk appetite - Low. We have a geographically diverse business, operating in both developed and developing countries in an array of different contexts. A perception that we are not respecting human rights or generating local sustainable benefits could have a negative impact on our ability to operate effectively, our reputation with stakeholders, our ability to secure access to new resources, our capacity to attract and retain the best talent and ultimately, our financial performance Description and potential impact - Respecting human rights and building strong relationships are fundamental to the current and future viability of our business. Areas that may be affected negatively include the health and safety of our workforce and surrounding communities, environmental damage and interactions with individuals and groups who live and work in or near our local communities. Poor performance can contribute to social instability and the perceived and real value of our assets. We have a geographically diverse business, operating in both developed and developing countries in an array of different contexts. In a number of regions where we operate, the socio-political environment is complex which presents additional business, social and security risks if not well understood and managed. The consequences of adverse community reactions or allegations of human rights incidents could also have a material adverse impact on the cost, profitability, ability to finance or even the viability of an operation and the safety and security of our workforce and assets. In addition, global connectivity means that local issues can quickly escalate to a regional, national and global level potentially resulting in reputational damage and social instability. Some of our mining operations are in remote areas where they are a major employer in the region. This presents particular social challenges when the mine's resources are depleted to an extent that it is no longer economic to operate and must be closed. Robust planning and stakeholder engagement are key to mitigating environmental and social closure risks. The destruction of indigenous cultural heritage during mining activities in Australia has highlighted the need for effective management processes and engagement, to protect areas and items of cultural significance, and to avoid business and reputation risks Developments - During 2021, Covid-19 continued to impact people's quality-of-life and contributed to localised areas of uncertainty around the world. Our first and foremost priority during the pandemic has been the health and wellbeing of our employees and communities, especially vulnerable groups. We have sought to support our communities by augmenting communication programmes to promote prevention measures, providing basic sanitation and medical materials and supporting local health systems and services. We continue where possible to work to support local health authorities in encouraging and delivering vaccines, where needed. The ensuing economic impacts of Covid-19 have amplified existing inequalities around the world, resulting in an escalation of civil unrest in many countries. In the Espinar region of Peru, social protests impacted our Antapaccay operation. The government deployed public security to return law and order in the region around the operation without harm to community members, security forces or our workforce. Artisanal and small-scale mining (ASM) continues to be a challenge at certain operations, most notably in the DRC. An area of the Mutanda permits, Chabara, has been illegally occupied by ASM cooperatives supported by semi-mechanised operators. We have been engaging with DRC authorities to try to recover control of Chabara following a peaceful relocation of the ASM cooperatives. Mitigating factors - Our approach is to minimise the local detrimental impacts of our business, engage openly and honestly to build lasting relationships and foster socio-economic resilient communities. In 2021, we enhanced our Closure Planning expectations and governance through our new Closure Planning Standard to ensure consistent and proactive performance in this important aspect of our operations' lifecycle. While our Group policies and standards apply to all our businesses, we tailor our community approach to be relevant and appropriate to the local context. We strive to uphold and respect the human rights of our workforce, local communities and others who may be affected by our activities, in line with the United Nations Guiding Principles on Business and human rights (UNGPs), and support resilience and capacity within our host communities. We have processes to identify, prevent and mitigate human rights risks and impacts across our business, and are committed to understanding and documenting the social risk and opportunities in the communities in which we operate. In the event that we cause or contribute to a negative impact on human rights, we strive to provide appropriate remedy to those affected in line with the UNGPs. We seek to apply the UN Voluntary Principles on Security and Human Rights in regions where there is a high risk to human rights from the deployment of public and private security forces. We respect communities' perspectives and actively seek to consult with them to inform our decision-making. Our ambition is to be a responsible, engaged and valued company wherever we operate and to contribute to healthy, resilient communities. We support the advancement of the interests of both our host communities and our assets. We seek to build enduring and trusting relationships by engaging openly and honestly and participating as an active member of society. We focus our social investments on initiatives and programmes to deliver long-term benefits fostering socio-economic resilience. We implement locally appropriate complaints and grievance processes in line with the UNGPs and welcome feedback and comments on our performance. We review all complaints received and take actions when necessary to address the issues raised. During late 2020, our Social Performance and Human Rights policies were updated following consultation with external subject matter experts and internal and external stakeholders. In 2021 we reviewed and/or updated our Social Performance, Human Rights and Security Standards. Our approach to ASM considers how ASM and large-scale mining can sustainably co-exist as distinct yet complementary sectors of a successful mining industry. We believe that legal ASM can play an important and sustainable role in many economies when carried out responsibly and transparently, including the DRC. We partner with the Fair Cobalt Coalition, an NGO aiming to positively transform ASM in the DRC. It is working towards eliminating child and forced labour, improving work practices in ASM operations and supporting alternative livelihoods to help increase incomes and reduce poverty. We continue to review and implement new or revised policies concerning cultural heritage management. Further information is available on our website at: glencore.com/sustainability/community-and-human-rights

Risk movement in 2021 - Stable Risk appetite - High. Industrial operations are inherently dangerous. Catastrophic events that take place in the natural resource sector can have disastrous impacts on workers, communities, the environment, and corporate reputation, as well as a substantial financial cost. Description and potential impact - The success of our business is dependent on a safe and healthy workforce. Identifying and managing risks to the safety and health of our people is essential for their long-term wellbeing. It also helps us to maintain our productivity. A number of our assets are in regions with poor approaches towards personal safety, little or no access to health facilities, and poor working conditions, and organisational cultures. Our operations around the world can have direct and indirect impacts on the environment and host communities. Our ability to manage and mitigate these may impact maintenance of our operating licences as well as affect future projects, acquisitions, and our reputation. Environmental, safety and health regulations may result in increased costs or, in the event of non-compliance or incidents causing injury or death or other damage at or to our facilities or surrounding areas, may result in significant losses. Failure to perform well may have long-term negative impacts for host communities and erode trust in the integrity of our organisation. Examples include, those arising from (1) interruptions in production, litigation and imposition of penalties and sanctions, (2) having licences and permits withdrawn or suspended while being forced to undertake extensive remedial clean-up action or to pay for government-ordered remedial clean-up actions, and (3) paying compensation and reparations to negatively impacted communities. Liability may also arise from the actions of any previous or subsequent owners or operators of the property, by any past or present owners of adjacent properties, or by third parties. We operate in some countries characterised with complex and challenging political and/or social climates. This results in a residual risk for compliance with our HSEC&HR policies and standards, as well as with external laws and regulations. Developments - In response to Covid-19, Glencore focused on efforts to ensure the resilience of the business, including daily monitoring of global conditions, anticipation of potential impacts, and development of action plans and controls to mitigate risks. At the start of the crisis, the corporate Covid-19 Global Response Incident Management Team and Steering Committee were established to maintain continuous communication and response support for our global industrial and marketing teams, resolving potential threats to business continuity, and focusing on the health and well-being of our workforce. In June 2021, Glencore developed its Covid-19 Vaccination Policy and Guiding Principles, in consultation with leading medical experts and released it to the business. Starting In 2020 and continuing through 2021, we conducted a review of our SafeWork programme, which is Glencore's approach to eliminating fatalities. SafeWork focuses on identifying and managing the hazards in every workplace and is built on a set of minimum expectations and mandatory protocols, standards, behaviours, and safety tools. Well-led, consistent application of SafeWork drives operating discipline and prevents fatal incidents. Reflecting the review's findings, we launched a refreshed SafeWork in early 2021, which included performance expectations and 2022 and 2023 targets. The Group continues to invest in its sustainability risks assurance process and its focus continues to be on the Group's HSEC catastrophic hazards. We continued the implementation of our Group-wide Tailings Storage Facility and Dam Management Standard throughout the business and participated in the development of the new Global Industry Standard on Tailings Management, in association with International Council on Mining & Metals member companies. In collaboration with industry tailings experts, we also initiated the development of our Tailings Management Academy, to provide training and capacity building for our employees in tailings management, and environmental, closure, and community-related practices. We regret that we have recorded 4 fatalities at our operations (2020: 8). Our Board and senior management are committed to ongoing efforts to improve practices to provide a safe working environment. No major or catastrophic environmental, community or human rights incidents have occurred during the year. Mitigating factors - We are committed to ensuring the safety and wellbeing of our people, communities, and environment around us. We implement Health, Safety, Environment, Community and Human Rights (HSEC&HR) policies and standards designed to (1) protect our people, communities, and the environment, and (2) ensure we comply with laws and external regulations. Our approach to the management of health, safety and the environment and our expectations of our workers and our business partners, are outlined in our policies and standards. These underpin our approach towards social, environmental, health, safety, and compliance indicators, providing clear guidance on the standards we expect all our operations to achieve. During 2021, the corporate HSEC&HR team continued its work in enhancing Group-level HSEC&HR governance and technical standards to ensure an ef?cient and consistent approach to managing HSEC&HR related issues across the business. We are working towards creating a workplace without fatalities, injuries, or occupational diseases through establishing a positive safety culture. We strive to achieve our ambitions of zero workplace fatalities and no major or catastrophic environmental incidents. Our commitment to complying with or exceeding the health, safety and environmental laws, regulations, and best practice guidelines applicable to our operations and products is driven through our sustainability and policies frameworks. We remain focused on the significant risks facing our industry arising from operational catastrophic events and take steps to implement appropriate controls to mitigate them. We work with local authorities, local community representatives and other partners, such as NGOs, to help overcome major public health issues in the regions where we work, such as Covid-19, HIV/AIDS, malaria and tuberculosis. Further details will also be published in our 2021 Sustainability Report. There can be no assurances that our policies, standards, procedures and guidelines will protect the Group against health, safety, and environmental risks

Risk movement in 2021 - Decrease Risk appetite - Medium. Being a resources company, we are subject to the inherent risk of sustained low prices of our main commodities, particularly affecting our industrial business. Description and potential impact - The revenue and earnings of substantial parts of our industrial asset activities and, to a lesser extent, our marketing activities, are dependent upon prevailing commodity prices. Commodity prices are influenced by several external factors, including the supply of and demand for commodities, speculative activities by market participants, global political and economic conditions, related industry cycles and production costs in major producing countries. The dependence of the Group (especially our industrial business) on commodity prices, supply, and demand of commodities, make this the Group's foremost risk. We are dependent on the expected volumes of supply or demand for commodities which can vary for many reasons, such as competitor supply, changes in resource availability, government policies and regulation, costs of production, global and regional economic conditions and demand in end markets for products in which the commodities are used. Supply and demand volumes can also be impacted by technological developments, e.g. commodity substitutions, fluctuations in global production capacity, geopolitical events, global and regional weather conditions, natural disasters, and diseases, all of which impact global markets and demand for commodities. Future demand for certain commodities might decline (e.g. fossil fuels), whereas others might increase (e.g. copper, cobalt, and nickel for their use in electric vehicles and batteries more broadly), taking into consideration the transition to a low carbon economy. Furthermore, changes in expected supply and demand conditions impact the expected future prices (and thus the price curve) of each commodity and significant falls in the prices of certain commodities (e.g. copper, coal, zinc and cobalt) can have a severe drag on our financial performance, impede shareholder returns and could lead to concerns by external stakeholders as to the strength of the Group's balance sheet. This risk is more prevalent in fossil fuels, given the drive towards net zero emissions over the long term. Net zero emissions requires demand for unabated coal and other hydrocarbon fuel sources to materially reduce over time, driven on by political pressures, societal expectations, and generally increased access to, and cost competitiveness of, lower carbon alternatives (i.e. renewables) and the likelihood of increased and broader implementation of carbon pricing/taxes across the geographies where the Group operates. The new or improved energy production possibilities and/or technologies are likely to reduce the demand for some commodities such as coal, however, at the same time, are likely to materially increase demand for other commodities. Any adverse economic developments, particularly those impacting China and fast growing developing countries, could lead to reductions in demand for, and consequently price reductions of, commodities, with particular risk to commodities used in steelmaking such as iron ore, metallurgical coal and zinc. Developments - Energy markets tightened significantly in H2 2021 leading to energy price increases across the board. Industrial metals prices remained at strong levels throughout the year. In this environment, our long-term plans for our industrial operations remained appropriate with no market-driven corrections required. Material portfolio changes were the acquisition of the two- thirds of the Cerrejon thermal coal business we did not already own, and the restart of the Mutanda copper/cobalt operation. Marketing operations benefited from underlying supply/demand tightness and volatility spikes across a number of commodities, also leading to the Board approving a temporary (and ultimately permanent) increase request to the Group's Value at Risk limit. The Russia/Ukraine conflict in 2022 has led to elevated volatility across many asset classes, including commodities. Depending on the duration of the conflict and the sanctions regime, global commodity flows may change materially from their pre-2022 situation. Mitigating factors - We continue to maintain focus on cost discipline and achieving greater operational efficiency, and we actively manage marketing risk, including daily analysis of Group value at risk (VaR). We maintain both a diverse portfolio of commodities, geographies, currencies, assets and liabilities and a global portfolio of customers and contracts. We seek to prepare for anticipated shifts in commodity demand, for example by putting a special focus on the parts of the business that will potentially grow with increases in usage of electric vehicles and battery production and recycling, and by closely monitoring fossil fuel (particularly thermal coal) demands. We can also reduce the production of any commodity within our portfolio in response to changing market conditions.

Risk movement in 2021 - Stable Risk appetite - Low. A cyber security breach, incident or failure of Glencore's IT systems could disrupt our businesses, put employees at risk, result in the disclosure of confidential information, damage our reputation, and create significant financial and legal exposure for the Group. Description and potential impact - Cyber risks for firms have increased significantly in recent years owing in part to the proliferation of new digital technologies (e.g. ransomware), nation-state activity, increasing degree of connectivity and a material increase in monetisation of cybercrime. Our activities depend on digital capabilities for industrial production, efficient operations, environmental management, health and safety, communications, transaction processing and risk management. We also depend on third parties in long supply chains that are exposed to the same cyber risks, but which are largely outside our control. The security of long interconnected commodity supply chains is an area of concern that we monitor closely to reduce the impact on the Group. The emergence of machine learning and artificial intelligence increases the volume and sophistication of fraud attempts. The rise of 'Deepfake' technology using machine learning makes it easier to manipulate audio content that could be used in phishing or fraud attacks by impersonating senior executives. Although Glencore invests heavily to monitor, maintain, and regularly upgrade its systems, processes and networks, absolute security is not possible. Developments - Our cyber security monitoring platforms frequently detect attempts to breach our networks and systems. During 2021, none of these events resulted in a significant breach of our IT environment nor resulted in any material business impact. Covid-19 has increased the degree of remote working and the potential attack surface area. We continue to witness a heightened level of sophistication and frequency of cyberattacks against all firms. We anticipate that 'supply chain cyberattacks' through which legitimate third party software is manipulated in an attempt to spread malware or gain access to systems will increase. We also expect that ransomware will remain an area of heightened threat focus. Mitigating factors - We publish IT security standards and proactively educate our employees in order to raise awareness of cyber security threats. Where possible, cyber exposure risks are mitigated through layered cyber security, proactive monitoring, and independent cyber security penetration tests to confirm the security of systems. We seek to keep our system software patches up to date and have global platforms to proactively manage patch compliance. We have adopted strict privileged access management to ensure administrator rights on critical systems are protected. We have multiple layers of email security and harden our computers and servers to protect against malware. Corporate applications and communications are secured with multiple layers of security including two-factor authentication and virtual private network (VPN) technology for remote access. We use global IT security platforms to proactively monitor and manage our cyber risks. We routinely conduct third party penetration tests to independently assess the security of our IT systems. We have a dedicated programme to enhance the monitoring and security of our Operational Technology (OT) platforms. Our IT Security Council sets the global cyber security strategy, conducts regular risk assessments, and designs cyber security solutions that seek to protect against emerging malware, viruses, vulnerabilities, and other cyber threats. Our Cyber Defence Centre is responsible for day-to-day monitoring of cyber vulnerabilities across the Group and driving remediation of threats. We have an incident response team that is accountable for coordinating the response in the event of a major cyber incident. During 2021, we continued to implement new capabilities to further enhance protection against ransomware, enhance perimeter security and enhance the security of our OT platforms.