Suppose Stora Enso's risk tolerance for each of the risks mentioned in the table is $3 million (the amount that it is willing to lose in the event the project does not work out). What risks would you suggest Stora Enso should take?

Risk	Non-Financial impacts	Probable Impact (in Million USD)	Probable velocity
Risk 1: Data hacking which could lead to a breach and loss of data	Loss of data security	1.7 to 1.9	High
Risk 2: Use of old technology saws which leads to 15% raw material wastage	Probable loss employee branding	3.1 to 3.4 Mn	Low
Risk 3: Pandemic induced market depression which could lead to reduced sales	Loss in motivation for the sales team	4.5 to 4.7 Mn	Medium
Risk 4: New regulations on working shifts that could lead to shutting down of night shift working in factories	Lay-offs of night shift workers	2.4 to 2.6 Mn	High
Risk 5: End customers preferring biodegradable plastic packaging which may impact the current product line	No growth in brand value	0.6 to 0.8 Mn	Low

Business case study

About Stora Enso Stora Enso Oyj, based in Helsinki, Finland, is a pulp, paper, and other forest products manufacturer. Although Europe accounts for the majority of revenues, the company also has important operations in Asia, South America, and the United States. Stora Enso is a leading global provider of sustainable solutions in packaging, biomaterials, wooden construction, and paper, and is a member of the bioeconomy. Its shares are listed on the Helsinki (STEAV, STERV) and Stockholm (STE A, STE R) stock exchanges, and it employs about 23,000 people with sales in over 50 countries. Stora Enso's fibre-based products are biodegradable, recyclable, and do not contain any fossil fuels. Its solutions provide low-carbon alternatives to finite-resource-based products. It believes that anything manufactured now from fossil-based resources can be manufactured using sustainable alternatives someday. Areas of Operations Area of Operations Details Packaging Materials With superior renewable and recyclable packaging materials based on both virgin and recycled fibre, the packaging materials sector is a world pioneer in the circular economy. Stora Enso helps businesses substitute fossil-based materials with low-carbon, renewable, and recyclable solutions for their food and beverage, pharmaceutical, or transportation packaging, meeting the concerns of today's environmentally friendly consumers. A wide range of barrier coatings allows for design optimisation for a variety of demanding packaging applications. Packaging Solutions Packaging Solutions is a division that creates and distributes high-end fibre-based packaging and services. Leading brands across several market sectors, including store retail, e-commerce and industrials, employ its high-end eco-friendly packaging materials. Corrugated and other converting, design services, automation solutions, and scalable breakthroughs like formed fibre and biocomposites are all part of the portfolio. Biomaterials The biomaterials division responds to the growing need for bio-based alternatives to products produced of fossil-based and hazardous materials. To develop novel solutions, the firm utilises all fractions of biomass, such as lignin and sugars. Stora Enso works towards replacing fossil-based materials with new applications such as carbon for energy storage, bio-based binders, and carbon fibre made from bio-based materials. The division's product portfolio includes a wide range of pulp grades to fulfil the needs of paper, board, tissue, textile and hygiene product manufacturers, as well as products derived from waste streams, such as tall oil and turpentine from biomass. Wood Products The wood products sector is Europe's largest sawn wood producer and a major developer of environmentally friendly wood-based construction solutions. The rapidly expanding building solutions division provides building concepts that promote low-carbon construction and environmentally friendly designs. Stora Enso creates digital tools to make designing wood-frame construction projects easier. It also provides applications for windows, doors, and the packaging industry. Forest The Forest division adds value to Stora Enso's renewable services by focusing on sustainable forest management, competitive wood supply, and innovation. The division is responsible for Stora Enso's forest assets in Sweden as well as a 41% stake in Tornator, which has the majority of its forest assets in Finland. Wood sourcing for Stora Enso's Nordic, Baltic, and Russian enterprises, as well as B2B customers, is handled by this division. Stora Enso is one of the world's largest private forest owners. Paper Stora Enso is Europe's second-largest paper manufacturer, with a long-standing client base and a diverse product offering for print and office applications. Clients benefit from Stora Enso's comprehensive range of recycled and virgin fibre paper products, as well as our technical competence and sustainability experience, as well as our mill and customer support centre network.

Organisational Structure Risk Management at Stora Enso Stora Enso's risk management methodology is closely integrated with the group's strategy because effective risk management is a competitive need and an intrinsic aspect of its value generation. They are focused on ensuring that the holistic, methodical, and proactive management of opportunities and risks, as well as well-defined mitigation activities, are an inherent element of our strategy formulation. Strategic and operational risks, as well as risks connected to compliance, financial markets, and reporting, are all taken into account, as are problems such as sustainability and the group's reputation. Once discovered, risks are thoroughly examined and evaluated in order to determine their financial and non-financial consequences, the chance of occurrence, and root causes. The corporation has made deliberate steps to integrate sustainability and ERM, in addition to raising the profile of sustainability inside the organisation. For example, in partnership with the sustainability function, Stora Enso appointed a Senior Vice President of ERM with sufficient sustainability credentials to manage ERM development. To coordinate risk management across the organisation, an internal ERM working group has been formed. The divisional risk managers and the Senior Vice President, ERM, are among the members of the working group. In addition, the ERM function engages in internal sustainability forums and working groups. The risk management process followed by Stora Enso has the following steps: Key definitions Objective setting Risk modelling Risk classification Identification and evaluation including risk assessment criteria Calculation of residual risk Report requirements and templates Determination of risk appetite Situation due to Pandemic During the pandemic, demand for paper fell roughly 18% for Stora Enso as well as its competitors. As the COVID-19 pandemic drove the transfer from paper material to digital devices, Stora Enso has announced the permanent closure of two paper mills, putting 1,100 jobs at risk. At a news conference, Chief Executive Annika Bresky commented, "This is the only move we can take to ensure the competitiveness of our paper company and Stora Enso as a whole." The pandemic has caused people to work from home and use more digital tools, has hastened the demise of the once-profitable print paper business, and has driven forestry companies to look for other sources of revenue. Demand for paper and pulp products has decreased as a result of digitalization. The European economy's dramatic slump has also had an impact on operations. Worsening trading conditions caused by geopolitical uncertainty such as trade wars and a hard Brexit also hurt Stora Enso. Sales and revenues have been declining for some time and are expected to continue declining in the future. As a result of the floor trade, demand for packaging materials has already decreased. It also had to deal with slower cross-border trade, which lowered the demand for packaging to wrap goods. In order to resolve this issue, Stora Enso will invest 10 million in the construction of a prototype factory to generate carbon materials for energy storage. Carbon derived from wood has the potential to be a crucial component in consumer electronics, autos, and large-scale energy storage systems.