Risk management

In line with best practices and regulatory guidelines, including those of the Bank of Russia, Russian Railways has established and continuously enhances its comprehensive risk management and internal control system (RMICS).

The RMICS is integrated into operational and project activities as well as strategic planning. This enables enhanced identification and assessment of risks (risk factors, causes, and potential impacts) and timely risk response, including through process analysis and improvement, while accounting for increased external influences, particularly from geopolitical and macroeconomic developments, as well as the ever changing business environment.

Thus, the underlying principles of Russian Railways’ RMICS are integration, comprehensiveness, structured approach, adaptability, and dynamic responsiveness.

The implemented RMICS ensures stable and efficient operations while enhancing risk awareness for informed decision‑making. This is achieved by establishing and maintaining a risk‑oriented culture, values, and behaviours across the organisation, which guide daily risk management and internal control practices.

Risk Management

RMICS participants

The RMICS relies on the three lines of defence model to allocate risk management roles and responsibilities among key stakeholders.

As the system’s efficient operation relies on interaction and information exchange between RMICS participants, the interaction within the RMICS is based on the established segregation of duties, corporate culture and code of conduct, as well as the process and activity structure.

Risk management process

The Company’s risk management process follows internal regulations and encompasses risk identification, assessment, mitigation, and monitoring, with risk reporting reviewed by executive bodies, the Audit and Risk Committee of the Board of Directors, and the Board of Directors and disclosed to relevant external stakeholders. The reports provide details of risk profiles, mitigation measures, and RMICS performance. The risk management process places particular emphasis on achieving sustainability goals, while adhering to the approved risk appetite.

RMICS assessment

To enhance RMICS effectiveness and to develop and prioritise improvement measures, an annual internal assessment (self‑assessment and assessment by the internal audit function) is conducted. External assessment is subject to resolution by the Board of Directors.

Following a resolution by the Audit and Risk Committee of the Board of Directors, and considering achieved results, an external assessment of Russian Railways’ RMICS effectiveness is scheduled for 2025.

The results of internal assessment are annually discussed by the Board of Directors following a preliminary review by the Board’s Audit and Risk Committee.

In 2024, the internal assessment of the risk management and internal control system was carried out by Zheldoraudit Internal Audit Centre in accordance with the internal audit manual on Assessment of the Risk Management and Internal Control System. The internal assessment resulted in the internal audit report on the RMICS current status, compliance with the main RMICS requirements, and the opinion on the efficient development of Russian Railways’ RMICS.

These findings guide further RMICS development initiatives. In addition, the Audit Commission of Russian Railways inspects and analyses the functioning of the internal control system and the financial and operational risk management system. The Commission keeps the shareholder, the Board of Directors, and the CEO, Chairman of the Management Board of Russian Railways updated on proposals aimed at enhancing the internal control system.

In line with the three lines of defence model, external oversight (including regular audits of certain projects) also contributes to continuous improvement of the RMICS.

For more details on risk management and RMICS improvements in the reporting year, see the Risk Management section of Russian Railways’ 2024 Annual Report.

Sustainability risks

In line with its integrated RMICS approach covering all processes, Russian Railways reviews the full spectrum of risks affecting achievement of its diverse operational goals, with particular focus on sustainability risks involving balanced consideration of social, environmental, and economic development dimensions.

Russian Railways accounts for all stakeholder interests, monitors and actively implements global sustainability trends, assesses risks, and develops its operations with sustainability considerations in mind, which enables us to identify growth drivers and leverage sustainability potential, balancing the opportunities and respective risks.

Information on sustainability risk management is available in the respective sections of the report:

  • social risks (Personnel Development section);
  • health and safety risks (Health and Safety section);
  • corruption risks (Anti‑Corruption section);
  • procurement risks (Procurement Management section);
  • climate change risks (Climate Action section);
  • information security risks (Information Security section).
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