Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Building Products & Furnishings Entities in the Building Products & Furnishings industry design and manufacture home improvement products, home and office furnishings, and structural wood building materials. The industry’s products include flooring, ceiling tiles, home and office furniture and fixtures, wood trusses, plywood, panelling and lumber. Entities typically sell their products through distribution channels to retail stores or through independent or entity-owned dealerships.
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  • Automobiles Automobiles industry entities manufacture passenger vehicles, light trucks and motorcycles. Industry players design, build and sell vehicles that use a range of traditional and alternative fuels and powertrains. They sell these vehicles to dealers for consumer retail sales as well as sell directly to fleet customers, including car rental and leasing entities, commercial fleets and governments. Because of the industry’s global nature, nearly all entities have manufacturing facilities, assembly plants and service locations in several countries around the world. The Automobiles industry is concentrated, with a few large manufacturers and a diversified supply chain. Given the industry’s reliance on natural resources and sensitivity to the business cycle, revenue is typically cyclical.
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Relevant Issues for both Industries (6 of 26)

Why are some issues greyed out? The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
  • Building Products & Furnishings Remove
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management in Manufacturing The Building Products & Furnishings industry creates value through energy-intensive manufacturing processes. Purchased electricity represents the largest share of energy consumption across the industry, while entities also may use fossil fuel energy on-site. The price of conventional grid electricity and volatility of fossil fuel prices may increase because of evolving climate change regulations and new incentives for energy efficiency and renewable energy, among other factors, while alternative energy sources become more cost-competitive. Decisions regarding energy sourcing and type, as well as the use of alternative energy, can create trade-offs related to the energy supply’s cost and reliability for operations. Since the industry operates on relatively narrow profit margins, reductions in energy consumption may have a significant influence on financial performance. The way an entity manages energy efficiency, its reliance on different types of energy and their associated sustainability risks, and access alternative energy sources are likely to impact financial performance.
    • Product Quality & Safety The category addresses issues involving unintended characteristics of products sold or services provided that may create health or safety risks to end-users. It addresses a company’s ability to offer manufactured products and/or services that meet customer expectations with respect to their health and safety characteristics. It includes, but is not limited to, issues involving liability, management of recalls and market withdrawals, product testing, and chemicals/content/ingredient management in products.
      • Management of Chemicals in Products The Building Products & Furnishings industry’s products can contain substances that may harm human health, including volatile organic compounds (VOCs) and potential reproductive toxins, carcinogens and endocrine disruptors. In general, products contain these substances at low concentrations, if at all, and therefore are not expected to pose a health concern. Nonetheless, entities may be exposed to potentially significant regulatory and reputational risk associated with the use of substances of concern. Actual or perceived human health risks create the potential for future regulation of product chemical content and possible reputational consequences for entities, which can significantly affect demand for products. The industry has engaged in voluntary efforts to eliminate such potentially harmful chemicals from products and use alternative materials. The adoption of building certification standards, such as the Leadership in Energy and Environmental Design (LEED) building rating system, has stimulated demand for products with reduced harmful chemical content. Entities that effectively manage harmful chemicals in their products may cultivate a long-term competitive advantage by increasing demand, reducing regulatory risk and improving brand value.
    • Labour Practices The category addresses the company’s ability to uphold commonly accepted labour standards in the workplace, including compliance with labour laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labour, forced or bonded labour, exploitative labour, fair wages and overtime pay, and other basic workers’ rights. It also includes minimum wage policies and provision of benefits, which may influence how a workforce is attracted, retained, and motivated. The category further addresses a company’s relationship with organized labour and freedom of association.
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    • Product Design & Lifecycle Management The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.
      • Product Lifecycle Environmental Impacts Depending on the specific building product or furnishing, significant environmental impacts can arise during raw material sourcing, transportation, manufacturing, use-phase or end-of-life. Increasing consumer and regulatory preference for less impactful products has spawned the development of more sustainable products, broadly termed ‘green building materials’. In addition, product lifecycle certification has arisen as a tool for entities and their customers to assess and improve a product’s lifecycle impact. Certification programmes typically examine specific sustainability characteristics of a product category and include the use of closed-loop materials that minimise a product’s end-of-life environmental impacts and reduce the need for extracting or producing virgin materials. Through product innovation and design that facilitates end-of-life product recovery and the use of less impactful materials, the adoption of product certification programmes, and partnerships with customers, manufacturers of building products can improve lifecycle impacts, reduce regulatory risk, meet growing customer demand and realise cost savings.
    • Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
      • Wood Supply Chain Management The Building Products & Furnishings industry uses large amounts of wood sourced from forests worldwide. Unsustainable production and timber harvesting can result in adverse environmental and social impacts, including biodiversity loss and harm to the livelihoods of forest-dependent communities. Entities inadvertently may source wood from areas susceptible to unsustainable forestry practices. Reports of illegal logging, environmental pollution or adverse impacts on communities can result in reputational repercussions that can damage an entity’s brand value, affecting demand for their products. In addition, regulations banning the importation of illegally produced wood can result in supply constraints, penalties and further damage to brand value. To mitigate these risks, entities increasingly are adopting third-party certifications verifying wood is grown and harvested in a sustainable manner. Obtaining wood sourcing certifications also can provide entities with a potential growth channel because they can satisfy customer demand for certified products.
    • Materials Sourcing & Efficiency The category addresses issues related to the resilience of materials supply chains to impacts of climate change and other external environmental and social factors. It captures the impacts of such external factors on operational activity of suppliers, which can further affect availability and pricing of key resources. It addresses a company’s ability to manage these risks through product design, manufacturing, and end-of-life management, such as by using of recycled and renewable materials, reducing the use of key materials (dematerialization), maximizing resource efficiency in manufacturing, and making R&D investments in substitute materials. Additionally, companies can manage these issues by screening, selection, monitoring, and engagement with suppliers to ensure their resilience to external risks. It does not address issues associated with environmental and social externalities created by operational activity of individual suppliers, which is covered in a separate category.
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  • Automobiles Remove
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      None
    • Product Quality & Safety The category addresses issues involving unintended characteristics of products sold or services provided that may create health or safety risks to end-users. It addresses a company’s ability to offer manufactured products and/or services that meet customer expectations with respect to their health and safety characteristics. It includes, but is not limited to, issues involving liability, management of recalls and market withdrawals, product testing, and chemicals/content/ingredient management in products.
      • Product Safety Driving is a risky activity, since factors such as distracted driving, drunk driving, speeding and dangerous weather conditions may result in accidents that expose drivers, passengers and bystanders to injuries and deaths. Defective vehicles may also cause accidents, and failure to detect defects before vehicles are sold may result in significant financial repercussions for auto manufacturers. In many countries, defective vehicles that do not meet safety requirements must be recalled and repaired or replaced at the manufacturer’s cost. Recalls may damage brand value, which may reduce revenues and growth potential and increase an entity’s risk profile and cost of capital. Entities that ensure vehicle safety and respond quickly when they identify defects may reduce the risks of regulatory action or customer lawsuits that may adversely affect their margins. Through effective management of vehicle safety, entities may improve brand value and sales over the long term.
    • Labour Practices The category addresses the company’s ability to uphold commonly accepted labour standards in the workplace, including compliance with labour laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labour, forced or bonded labour, exploitative labour, fair wages and overtime pay, and other basic workers’ rights. It also includes minimum wage policies and provision of benefits, which may influence how a workforce is attracted, retained, and motivated. The category further addresses a company’s relationship with organized labour and freedom of association.
      • Labour Practices Collective bargaining agreements cover many workers in the Automobiles industry guiding fair wage discussions, safe working conditions and freedom of association, which are among basic workers’ rights. Because of the global nature of the industry, auto entities may also operate in countries where workers’ rights are inadequately protected. Effective communication by management regarding issues such as pay and working conditions may prevent conflicts between workers and management that may result in strikes, which slow or suspend manufacturing, reduce revenues and increase operational risk. Auto manufacturers that manage workers’ rights effectively may improve the long-term financial sustainability of their operations by enhancing worker productivity.
    • Product Design & Lifecycle Management The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.
      • Fuel Economy & Use-phase Emissions Motor vehicle fossil fuel combustion accounts for a significant share of the greenhouse gas (GHG) emissions contributing to global climate change. Engine exhaust also generates local air pollutants such as nitrogen oxides (NO?), volatile organic compounds (VOCs) and particulate matter (PM), which can threaten human health and the environment. In this context, vehicle emissions increasingly concern consumers and regulators around the world. Although use-phase emissions are downstream from auto manufacturers, regulations often focus on auto manufacturers to reduce these emissions, such as through fuel economy standards. More stringent emissions standards and changing consumer demands are driving electric vehicle and hybrid market expansion, as well as for high fuel-efficiency conventional vehicles. Moreover, manufacturers are designing innovative vehicles made with lighter-weight materials to improve fuel efficiency. Entities that meet current fuel-efficiency and emissions standards and continue to innovate to meet or exceed future regulatory standards in various markets may strengthen their competitive position and expand their market share, while mitigating the risk of reduced demand for conventional vehicles.
    • Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
      None
    • Materials Sourcing & Efficiency The category addresses issues related to the resilience of materials supply chains to impacts of climate change and other external environmental and social factors. It captures the impacts of such external factors on operational activity of suppliers, which can further affect availability and pricing of key resources. It addresses a company’s ability to manage these risks through product design, manufacturing, and end-of-life management, such as by using of recycled and renewable materials, reducing the use of key materials (dematerialization), maximizing resource efficiency in manufacturing, and making R&D investments in substitute materials. Additionally, companies can manage these issues by screening, selection, monitoring, and engagement with suppliers to ensure their resilience to external risks. It does not address issues associated with environmental and social externalities created by operational activity of individual suppliers, which is covered in a separate category.
      • Materials Sourcing Entities in the Automobiles industry commonly rely on rare earth metals and other critical materials as important inputs. Many of these inputs have few substitutes and often are sourced from a few countries, many of which may be subject to geopolitical uncertainty. Other sustainability impacts related to climate change, land use, resource scarcity and conflict in regions where the industry’s supply chain operates are also increasingly shaping the industry’s ability to source materials. Additionally, increased competition for these materials because of growing global demand from other sectors may result in price increases and supply risks. These materials play a crucial role in clean energy technologies, such as electric and hybrid vehicles. As regulators strive to reduce greenhouse gas emissions and consumer demand grows for more fuel-efficient vehicles, the share of hybrids and zero emission vehicles (ZEVs) produced by the Automobiles industry may continue to increase in the future. Entities that limit the use of critical materials, secure their sourcing and develop alternatives may mitigate supply disruptions and volatile input prices, which could adversely affect their margins, risk profile and cost of capital.
      • Materials Efficiency & Recycling Auto manufacturing involves the use of significant amounts of materials (including steel, iron, aluminium and plastics) and can generate substantial amounts of waste (including scrap metal, paint sludge and shipping materials). As the rate of vehicle ownership expands globally and millions of vehicles reach the end of their useful lives each year, automobile lifecycle environmental impacts are increasing. Automobile entities may focus on innovation in design as well as process and technological improvements to mitigate these impacts and achieve financial benefits. Entities that improve materials efficiency in their production processes, including reducing waste and reusing or recycling waste and scrapped vehicles, may reduce vehicle lifecycle environmental impacts. Through such innovation, entities may achieve cost savings by reducing input costs and mitigating potential regulatory fines or penalties. They may also mitigate production input price fluctuations from periodic or long-term resource scarcity.

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