Governance Framework

Reliance’s Risk Management Framework is designed as an end-to-end structure for identifying, managing, and reporting risks across the Group’s operations to the Board.

Executive Committees provide oversight and governance through Group Operational Risk Committee, Group Financial Risk Committee, Group Audit & Disclosure Committee, Group Compliance Committee and Group People Committee.

Business Risk and Assurance Committees are held at the business, function, and Group levels. These forums integrate multidisciplinary views on key organisational risks, prioritise the most relevant risks and align risk management, internal control and assurance activities across the Three Lines of Defence.

Business and Functional Leaders are accountable for safe and reliable incident-free daily operations through identification, mitigation and monitoring of existing and new risks on a day-to-day basis.

Risks and Response

Strategic and Commercial Risks

Climate Change and Energy Transition Impact

Risk Description

The increasing frequency and intensity of climate-related changes pose risks to physical assets, operations, and value chains.

Transition risks from evolving regulations, increasing stakeholder expectations, shifting consumer preferences, and technological advancements could potentially impact RIL.

Risk Response

Reliance integrates climate risk assessments across its business strategy. Each business conducts regular review, develops tailored mitigation plans and aligns responses with its broader climate resilience goals. Facilities are designed to withstand climate-related challenges. RIL takes necessary interventions to ensure workforce well-being and to maintain diversified supply chains.

Committed to its 15-year vision of fostering sustainable energy solutions and innovative materials since 2020, RIL continues to invest in energy transition. It is making progress in bioenergy, solar, energy storage, and green hydrogen. RIL integrates climate-related considerations into its strategic planning, investment evaluations, risk management and long-term supply and demand projections. It monitors progress towards its Net Carbon Zero target, underpinned by robust governance.

Commodity Prices and Markets

Risk Description

Global crude oil prices continue to remain volatile on the back of dynamic interplay of various factors such as geopolitical volatility in the Middle East, redirection of shipping routes, OPEC+ and non-OPEC production decisions, regional capacity additions and downstream supply-demand realignments, evolving sanctions and trade tariff regimes and rate of recovery of Chinese economy.

New refining capacity in Nigeria & China capped product prices and Red Sea blockage led to higher freight for shipping our products to Europe.

Downstream chemical product prices and margins remained under pressure with significant new capacity additions, especially in China.

Risk Response

RIL leveraged its advantaged feedstock access and product flexibility to mitigate volatility.

Fleet deployment of Time Chartered vessels, using Suezmax/VLCC vessels to ship our products into international markets leveraging global reach to
maximise net-backs.

Focus on domestic placement to meet growing domestic demand supported downstream operating rates and profitability.

We continuously strive to maintain operational stability and profitability by diversifying suppliers, monitoring their performance, ensuring compliance, and maintaining inventory levels to mitigate the risk of supply disruptions.

Customer Experience and Retention

Risk Description

Sub-optimal customer experience may result in customer dissatisfaction and churn.

Customer shopping needs have evolved significantly, driven by advances in technology and changing lifestyles. Today’s shoppers seek convenience, personalised experiences, and seamless omnichannel interactions, blending online and offline shopping.

Traditional retail brands must re-invent themselves and turn to technology to provide an enhanced shopping experience that satisfies customers.

Risk Response

Reliance enhances product offerings and service delivery by providing customers with world-class products and offerings ensuring (a) best-in‑class technology,
(b) availability across geographies and channels, (c) customer-centric solutions and (d) innovative products and offerings to create new market segments.

Consistent push to incorporate a bevy of technologies like Artificial Reality, Virtual Reality & Artificial Intelligence is undertaken to provide all-new experiences, enabling customers to visualise, customise, try-on and engage in interactive shopping experiences.

Oversight Over Investee Companies/Alliances

Risk Description

Rising urbanisation, evolving consumer demand, and a robust economy is set to accelerate India’s dynamic organised retail sector.

Strategic alliances with other businesses/companies could have an adverse impact on our financial performance and competitive position.

Risk Response

Reliance aligns with investee companies and partners to ensure business continuity, compliance, and strategic coherence. It strives to provide customers with unlimited choice, outstanding value proposition, superior quality and unmatched experience across the full spectrum of products and services. This is being enabled by focusing on internal growth within each business and expanding externally through strategic alliances.

These expansion plans/alliances have enabled us to foray into FMCG, Own Labels, Beauty, Convenience stores & cafes under our umbrella.

Governance processes are supported by enterprise risk management tools and frameworks.

Talent to Support Scaling Business

Risk Description

As businesses scale rapidly, the need for skilled and future-ready talent becomes critical.

Risk Response

Reliance invests in nurturing and retaining talent through structured development programmes and training, aligned with its business growth plans.

Data Privacy Risk

Risk Description

With rising digital adoption, there are increased risks around data collection, processing, sharing, and storage, including legal and regulatory compliance.

Risk Response

Reliance follows ‘privacy-by-design’ principles. Data governance and privacy protocols ensure that all data is processed securely, ethically, and in compliance with applicable laws.

Cybersecurity Risk

Risk Description

As cybersecurity continues to remain a key business globally, and for Reliance, prioritising it is essential for ensuring long-term sustainability in an increasingly complex and evolving digital risk environment.

Risk Response

Reliance implements a ‘Zero Trust’ framework and continuously strengthens its cyber defences through AI-driven monitoring, encryption, and proactive vulnerability assessments to manage a rapidly evolving threat landscape.

Safety and Operational Risks

Health, Safety and Environmental (HSE) Risks

Risk Description

Reliance has established robust systems to proactively identify potential risks that may affect our stakeholders and remains firmly committed to mitigating HSE risks across all operations.

Considering the operational environment of our facilities, we manage and mitigate a range of risks, i.e., loss of containment of hazardous materials, fire and explosion hazards, exposure to extreme weather conditions, natural disasters, etc.

Effective risk management, compliance, and safety measures are crucial to safeguarding employees, customers, and ensuring business continuity.

Risk Response

Our facilities, designed with state-of-the-art technology and safe operating practices, are managed by skilled professionals. Digitalisation of risk management has progressed, enhancing visibility and control over operations. Risk-based oversight by subject matter experts is conducted up to the supervisory board level. HSE risk management is integrated throughout project lifecycle of all projects including Oil to Chemicals, New Energy Initiatives, with appropriate controls at every stage gate. Operating Management System (OMS) drives safe, sustainable, reliable, and compliant operations and Change Agents for Safety, Health, and Workplace Environment (CASHE) empowers employees to continually improve safety. Leadership’s strong HSE and sustainability commitment drives a zero-incident culture, protecting stakeholders and aligning with RIL’s operational excellence vision.

Physical Security and Natural Calamity Risks

Risk Description

Reliance faces inherent risks relating to asset security, loss prevention, platform abuse and data theft amid online growth.

Risk Response

Ongoing risk assessment shapes strategy, focusing on effective training, asset protection, preventive and proactive audits for loss prevention, online transaction analysis, predictive analytics, and surveillance to enhance security and operational integrity.

Compliance and Control Risks

Regulatory Compliance Risks

Risk Description

Increased regulatory scrutiny and changing businesses with strategic acquisitions require swift alignment with legal and regulatory compliances.

Risk Response

Reliance has adopted a digitally integrated comprehensive compliance management framework. It aligns business processes, risks and controls, and is equipped to align with changes in business and regulatory environment. It enables efficient governance and zero tolerance to non-compliance.

Financial Risks

Treasury Risks

Risk Description

Foreign Exchange Risk: Rupee depreciation impacts the landed cost of the foreign currency liabilities.

Liquidity Risk: Tight liquidity conditions can impact the rollover of maturing liabilities.

Interest Rate Risk: High interest rates for USD and INR borrowings impact RIL’s finance costs.

Credit Risk in Investment Portfolio: Corporate Bonds and Debt Mutual Funds in RIL’s portfolio carry issuer-related credit risks.

Risk Response

Foreign Exchange risk: Foreign currency borrowings are hedged through a combination of natural hedges and market hedges.

Liquidity Risk: Timely refinancing and avoiding bunching up of repayments helped us mitigate the liquidity risk.

Interest Rate Risk: Maintaining an appropriate mix of fixed and floating rate liabilities helped minimise the impact of interest rate risk on finance costs.

Credit risk in investment portfolio: Investments in highly rated instruments directly through its Corporate Bond portfolio and indirectly through its Mutual fund portfolio helps minimise credit risk.

Insurance – Risk Mitigation

Our corporate risk management philosophy prioritises appropriate protection against unexpected risks by transferring them to reputable insurers. We utilise insurance as a key risk mitigation tool by conducting thorough evaluation of insurable risks. Our primary objective for cover selection is to secure risk mitigation that provides effective protection against potential negative financial impacts on our balance sheet.

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