Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Multiline and Specialty Retailers & Distributors The Multiline and Specialty Retailers & Distributors industry encompasses a variety of retailing categories such as department stores, mass merchants, home products stores and warehouse clubs, as well as a smaller segment of distributors like electronics wholesalers and automotive wholesalers. These entities (except for the distribution segment) commonly manage global supply chains to anticipate consumer demands, keep costs low and keep products stocked in their brick-and-mortar storefronts. This is a highly competitive industry in which each category generally has a small number of important players characterised by generally low margins. The relatively substitutable nature of retail makes entities in this industry especially susceptible to reputational risks.
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  • Asset Management & Custody Activities Asset Management & Custody Activities industry entities manage investment portfolios on a commission or fee basis for institutional, retail and high net-worth investors. In addition, entities in this industry provide wealth management, private banking, financial planning, and investment advisory and retail securities brokerage services. Investment portfolios and strategies may be diversified across multiple asset classes, which may include equities, fixed income and hedge fund investments. Specific entities are engaged in venture capital and private equity investments. The industry provides essential services to a range of customers from individual retail investors to large, institutional asset owners to meet specified investment goals. Entities in the industry range from large multi-jurisdictional asset managers with a wide range of investable products, strategies and asset classes to small boutique entities providing services to specific market niches. While large entities generally compete based on management fees charged for their services as well as their potential to generate superior investment performance, the smaller entities generally compete on their ability to provide products and services customised to satisfy the diversification needs of individual clients. The global 2008 financial crisis and subsequent regulatory regime developments highlight the industry’s importance in providing fair advice to customers and managing risks at the entity, portfolio and macroeconomic levels.
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Relevant Issues for both Industries (7 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.
  • Multiline and Specialty Retailers & Distributors 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 Retail & Distribution Entities in this industry require significant amounts of energy for retail facilities and warehouses. An increasing number of greenhouse gas (GHG) emissions regulations and incentives for energy efficiency and renewable energy may result in price increases for conventional electricity sources while making alternative sources more cost-competitive. Fossil fuel-based energy production and consumption contribute to significant environmental impacts, including climate change and pollution. Energy sourcing decisions can create trade-offs related to energy supply costs and operational reliability. Overall energy efficiency and access to alternative energy sources are becoming increasingly important for entities to manage. Efficiency in this area can have financial implications through direct cost savings, which are particularly beneficial in this low-margin industry.
    • Data Security The category addresses management of risks related to collection, retention, and use of sensitive, confidential, and/or proprietary customer or user data. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed. It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data.
      • Data Security Consumers trust retail entities with their financial and personal data every time they make a noncash transaction with a credit or debit card or other method. Credit cards and debit cards have eclipsed cash and cheques as consumers’ preferred payment methods in many jurisdictions around the world. In these noncash transactions, retailers build up a relationship of trust with consumers, assuring them of the safety of their personal information. Data breaches can occur both through breaches of the physical payment technology, called point-of-sales breaches, as well as through cyber-attacks. As consumers become more educated about the threats of cybercrime, their perceptions of an entity’s cybersecurity will become increasingly important to maintain or gain market share. Retailers that prevent major data breaches also can avoid harming brand value and reduce liabilities.
    • Selling Practices & Product Labeling The category addresses social issues that may arise from a failure to manage the transparency, accuracy, and comprehensibility of marketing statements, advertising, and labeling of products and services. It includes, but is not limited to, advertising standards and regulations, ethical and responsible marketing practices, misleading or deceptive labeling, as well as discriminatory or predatory selling and lending practices. This may include deceptive or aggressive selling practices in which incentive structures for employees could encourage the sale of products or services that are not in the best interest of customers or clients.
      None
    • 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 The retail industry’s significance to the global economy as a major employer often puts it at the centre of public labour-practice discussions. These discussions can have serious reputational implications for entities in the industry if their labour practices are poor. The low average wages typical of the industry, which help entities maintain low prices on products, may increase these labour-related risks. Since customers regularly interact directly with retail employees, entities may experience decreased market share and revenue from negative consumer sentiment because of poor labour relations. Entities can enhance labour productivity and employee engagement by taking a long-term approach to managing workers in areas such as compensation and workers’ rights. In addition to mitigating risks, improvements in labour productivity may strengthen an entity’s reputation and reduce its cost of capital.
    • Employee Engagement, Diversity & Inclusion The category addresses a company’s ability to ensure that its culture and hiring and promotion practices embrace the building of a diverse and inclusive workforce that reflects the makeup of local talent pools and its customer base. It addresses the issues of discriminatory practices on the bases of race, gender, ethnicity, religion, sexual orientation, and other factors.
      • Workforce Diversity & Inclusion The Multiline and Specialty Retailers & Distributors industry is consumer-facing and relies on communicating effectively with customers during the sales process and adapting to changing consumer demands for products. As many developed markets undergo massive demographic shifts, including increases in minority populations, entities in this industry can benefit from ensuring that their culture and hiring and promotion practices embrace building a diverse workforce for management and junior staff. Retailers that respond to this demographic shift and employ staff who can recognise the needs of diverse populations may be better positioned to capture demand from consumer markets whose members have traditionally been overlooked, providing entities a competitive advantage. Furthermore, such entities may benefit from improved reputations among consumers, as well as decreased legal and regulatory risks.
    • 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 Sourcing, Packaging & Marketing Entities in the Multiline and Specialty Retailers & Distributors industry sell a wide array of products including electronics, clothing, furnishings and cosmetics, all of which have environmental and social impacts throughout their lifecycles. The size and buying power of many entities in this industry allow them to work with their suppliers to source products and packaging with lower lifecycle environmental and social impacts. Entities that perform well in this regard may benefit from increased customer demand and improved margins. To take a proactive approach to engaging suppliers, entities in the industry may employ strategies such as using certification standards and reducing the environmental impacts of packaging.
    • Business Ethics The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.
      None
  • Asset Management & Custody Activities 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
    • Data Security The category addresses management of risks related to collection, retention, and use of sensitive, confidential, and/or proprietary customer or user data. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed. It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data.
      None
    • Selling Practices & Product Labeling The category addresses social issues that may arise from a failure to manage the transparency, accuracy, and comprehensibility of marketing statements, advertising, and labeling of products and services. It includes, but is not limited to, advertising standards and regulations, ethical and responsible marketing practices, misleading or deceptive labeling, as well as discriminatory or predatory selling and lending practices. This may include deceptive or aggressive selling practices in which incentive structures for employees could encourage the sale of products or services that are not in the best interest of customers or clients.
      • Transparent Information & Fair Advice for Customers Asset managers have legal obligations and fiduciary duties related to record keeping, operating and marketing, disclosure requirements and prevention of fraudulent activities. Regulations regarding Asset Management & Custody Activities are intended to align the interests of entities and their clients, limiting conflicts of interest. This alignment, along with the prevalence of asset managers earning fees based on the amount of assets under management, encourages entities to provide clients with investment strategies that match clients’ risk-return profiles. Entities also face significant challenges in ensuring clients understand the nature of investment strategy risks. Failure to provide services that satisfy customer expectations may result in lengthy and costly litigation, diminished trust with clients and lower sales. Enhanced disclosure on procedures or programmes that provide adequate, clear and transparent information about products and services, employees’ regulatory violation records and the amount of fines and settlements associated with professional integrity will provide investors with an advanced understanding of how well entities manage risks associated with this issue and whether they are able to preserve long-term value for shareholders.
    • 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.
      None
    • Employee Engagement, Diversity & Inclusion The category addresses a company’s ability to ensure that its culture and hiring and promotion practices embrace the building of a diverse and inclusive workforce that reflects the makeup of local talent pools and its customer base. It addresses the issues of discriminatory practices on the bases of race, gender, ethnicity, religion, sexual orientation, and other factors.
      • Employee Diversity & Inclusion Entities in the Asset Management & Custody Activities industry face significant competition for skilled employees. As the industry continues to undergo rapid innovation through the introduction of more complex financial products and computerised algorithmic and high-frequency trading, the ability of entities to attract and retain skilled employees may increase in importance. By ensuring gender and racial diversity throughout the organisation, entities may expand their candidate pools, which may reduce hiring costs and improve operational efficiency. Evidence also suggests that entities with more diverse groups of employees may enhance the risk-return characteristics of investment portfolios.
    • 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.
      • Incorporation of Environmental, Social, and Governance Factors in Investment Management & Advisory Asset Management & Custody Activities entities maintain a fiduciary responsibility to their clients. These entities must consider and incorporate an analysis of all material information into investment decisions, including environmental, social and governance (ESG) factors. The process of ESG investment involves consideration of ESG factors in valuation, modelling, portfolio construction, proxy voting and engagement with investees and, as a result, in investment decision-making by asset and wealth managers. As the management and use of non-financial forms of capital increasingly contribute to market value, incorporation of ESG factors in the analysis of investees has become more relevant. Research has established that an entity’s management of some ESG factors may impact materially both its accounting and market returns. Therefore, deep understanding of investees’ ESG performance, integration of ESG factors in valuation and modelling, as well as engagement with investees on sustainability issues allows asset managers to generate superior returns. On the other hand, asset management and custody activities industry entities that fail to consider these risks and opportunities in their investment management activities may witness diminished investment portfolio returns that may result in reduced performance fees. Over the long term, these failures could result in an outflow of assets under management (AUM), the loss of market share and lower management fees.
      • Financed Emissions Entities participating in asset management activities face risks and opportunities related to the greenhouse gas emissions associated with those activities. Counterparties, borrowers or investees with higher emissions might be more susceptible to risks associated with technological changes, shifts in supply and demand and policy change which in turn can impact the prospects of a financial institution that is providing financial services to these entities. These risks and opportunities can arise in the form of credit risk, market risk, reputational risk and other financial and operational risks. For example, credit risk might arise in relation to financing clients affected by increasingly stringent carbon taxes, fuel efficiency regulations or other policies; credit risk might also arise through related technological shifts. Reputational risk might arise from financing fossil-fuel projects. Entities participating in asset management activities are increasingly monitoring and managing such risks by measuring their financed emissions. This measurement serves as an indicator of an entity’s exposure to climate-related risks and opportunities and how it might need to adapt its investment strategies over time.
    • Business Ethics The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.
      • Business Ethics The regulatory environment surrounding the Asset Management & Custody Activities industry continues to evolve internationally. Entities must adhere to a complex and often inconsistent set of rules relating to performance and conduct, as well as provide disclosure on issues including insider trading, tax evasion and clearing requirements in over-the-counter derivatives markets. Entities are subject to strict legal requirements as fiduciaries or custodians of their clients. In some jurisdictions, enhanced rewards for whistle-blowers may increase the number of complaints brought to regulators. Entities that ensure regulatory compliance through robust internal controls may build trust with clients, increase revenue and protect shareholder value by minimising losses incurred because of legal proceedings.

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Multiline and Specialty Retailers & Distributors
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