Industry Comparison

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  • Oil & Gas – Exploration & Production Oil & Gas - Exploration & Production (E&P) entities explore for, extract or produce energy products such as crude oil and natural gas, which comprise the upstream operations of the oil and gas value chain. Entities in the industry develop conventional and unconventional oil and gas reserves; these include shale oil or gas reserves, oil sands and gas hydrates. Activities covered by this standard include the development of both on-shore and off-shore reserves. The E&P industry creates contracts with the Oil and Gas Services industry to conduct several E&P activities and to obtain equipment and oilfield services.
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  • Food Retailers & Distributors The Food Retailers & Distributors industry consists of entities engaged in wholesale and retail sales of food, beverage and agricultural products. Store formats include retail supermarkets, convenience stores, warehouse supermarkets, liquor stores, bakeries, natural food stores, specialty food stores, seafood stores and distribution centres. Entities may specialise in one type of store format or have facilities that contain many formats. Products typically are sourced worldwide and include fresh meat and produce, prepared foods, processed foods, baked goods, frozen and canned foods, non-alcoholic and alcoholic beverages, and a wide selection of household goods and personal care products. Food retailers also may produce or sell private-label products.
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Relevant Issues for both Industries (18 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.
  • Oil & Gas – Exploration & Production Remove
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    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
      • Greenhouse Gas Emissions Exploration & Production (E&P) activities generate significant direct greenhouse gas (GHG) emissions from a variety of sources. Emissions may be combusted, including those arising from flaring or power generation equipment, or uncombusted, including those emissions arising from gas processing equipment, venting, flaring and fugitive methane. Regulatory efforts to reduce GHG emissions in response to climate change related risks may result in additional regulatory compliance costs and risks for E&P entities. With natural gas production from shale resources expanding, the management of the emission of methane, a highly potent GHG, from oil and gas E&P systems has emerged as a major operational, reputational and regulatory risk for entities. Furthermore, the development of unconventional hydrocarbon resources may be more or less GHG-intensive than conventional oil and gas, with associated effects on regulatory risk. Energy efficiency, use of less carbon-intensive fuels, or process improvements to reduce fugitive emissions, venting and flaring, can provide direct benefits to E&P entities in the form of reduced costs or increased revenue.
    • Air Quality The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category.
      • Air Quality Air emissions from Exploration & Production (E&P) operations other than greenhouse gas emissions include air pollutants and volatile organic compounds (VOCs), which can create significant and localised environmental or health risks. Of particular concern are sulphur dioxide, nitrogen dioxide and VOC emissions. The financial consequences entities face from air emissions vary depending on the specific locations of operations and the prevailing air emissions regulations. Impacts on human health may be exacerbated if E&P operations breach air emissions limits close to population centres. Amid increasing regulatory and public concerns about air quality, active air quality management through technological and process improvements could allow entities to mitigate adverse financial effects of regulations. Entities could benefit from operational efficiencies that may result in a lower cost structure over time.
    • 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.
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    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
      • Water Management Depending on the extraction technique, exploration and production operations may consume significant quantities of water, which may expose entities to the risk of reduced water availability, regulations limiting use, or related cost increases, particularly in water-stressed regions. Contamination of local water resources can result from incidents involving produced water, flowback water, hydraulic fracturing fluids and other well fluids. Historically, the possible impacts of hydraulic fracturing operations and the risk of groundwater supply contamination have raised concerns. Reducing water use and contamination through recycling, other water management strategies, and use of non-toxic fracturing fluids could create operational efficiency for entities and reduce their operating costs. Such strategies could also minimise the effects that regulations, water supply shortages and community-related disruptions have on operations.
    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
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    • Ecological Impacts The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.
      • Biodiversity Impacts The Exploration & Production (E&P) industry’s activities can have significant impacts on biodiversity. Examples include habitat loss and alteration through land use for exploration, production, disposal of drilling and associated wastes, and decommissioning of onshore and offshore wells. Oil spills and leaks are a threat to species and habitats affected by hydrocarbon contamination. Biodiversity impacts of E&P operations can affect the valuation of oil and gas reserves and create operational risks. Because of increasing protection of ecosystems through popular consensus and legislation, the environmental characteristics of the land where reserves are located may lead to higher, or even prohibitive extraction costs. Entities could also face regulatory or reputational barriers to accessing reserves in ecologically sensitive areas. This may include new protection statuses afforded to areas where reserves are located. Examples of such areas include the Arctic and shorelines with mangroves and swamps, which are not only extremely ecologically sensitive, but also entail more complex and expensive clean-up operations for hydrocarbon spills or leaks. Depreciation in the future value of reserves may be mitigated by considering the proximity of reserves in or near protected areas as part of the decision-making process. Entities with a good reputation for minimising biodiversity impacts could gain a competitive advantage in accessing new reserves in or near protected areas. Ongoing E&P operations could be at risk in the absence of effective environmental management plans for various stages of the project lifecycle because of regulatory penalties, litigation, community protests and associated costs.
    • Human Rights & Community Relations The category addresses management of the relationship between businesses and the communities in which they operate, including, but not limited to, management of direct and indirect impacts on core human rights and the treatment of indigenous peoples. More specifically, such management may cover socio-economic community impacts, community engagement, environmental justice, cultivation of local workforces, impact on local businesses, license to operate, and environmental/social impact assessments. The category does not include environmental impacts such as air pollution or waste which, although they may impact the health and safety of members of local communities, are addressed in separate categories.
      • Security, Human Rights & Rights of Indigenous Peoples Exploration & Production (E&P) entities face additional community-related risks when operating in conflict zones; in areas with weak or absent governance institutions, rule of law, or legislation to protect human rights; or in areas with vulnerable communities such as indigenous peoples. Entities using private or government security forces to protect their workers and assets may knowingly or unknowingly contribute to human rights violations, including the use of excessive force. Entities perceived as contributing to human rights violations or failing to account for indigenous peoples’ rights may be affected by protests, riots or suspension of permits. These entities could face substantial costs related to compensation or settlement payments, and write-downs in the value of their reserves in such areas. In the absence of applicable jurisdictional laws or regulations to address such cases, several international instruments have emerged to provide guidelines for entities. These instruments include obtaining the free, prior and informed consent of indigenous peoples for decisions that affect them. Several countries have implemented specific laws protecting indigenous peoples’ rights, creating increasing regulatory risk for entities that violate those rights.
      • Community Relations Exploration & Production (E&P) activities take place over many years and can have a wide range of adverse effects on communities. Community rights and interests may be affected by the environmental and social impacts of E&P operations, such as competition for access to local energy or water resources, air and water emissions, and waste. Entities frequently need support from local communities to obtain permits and leases and conduct their activities without disruptions. Entities may experience adverse financial impacts if the community interferes, or lobbies its government to interfere, with the rights of an E&P entity in relation to their ability to access, develop and produce reserves. In addition to community concerns about the direct impacts of projects, the presence of E&P activities may create associated socioeconomic concerns related to education, health, livelihoods and food security for the community. E&P entities engaging in rent-seeking and exploiting a community’s resources without providing proportional socioeconomic benefits in return may be exposed to actions by host governments and communities that restrict their activities or impose additional costs. These could include imposition of ad hoc taxes and export restrictions. These risks vary depending on the country and could be higher in countries heavily reliant on oil and gas for their economic growth. Entities in the extractives industries can adopt various community engagement strategies in their global operations to manage risks and opportunities associated with community rights and interests, such as integrating community engagement into each phase of the project cycle. Entities are beginning to adopt a ‘shared value’ approach to provide significant socioeconomic benefits to communities and allow them to operate profitably.
    • 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.
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    • 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.
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    • Customer Welfare The category addresses customer welfare concerns over issues including, but not limited to, health and nutrition of foods and beverages, antibiotic use in animal production, and management of controlled substances. The category addresses the company’s ability to provide consumers with manufactured products and services that are aligned with societal expectations. It does not include issues directly related to quality and safety malfunctions of manufactured products and services, but instead addresses qualities inherent to the design and delivery of products and services where customer welfare may be in question. The scope of the category also captures companies’ ability to prevent counterfeit products.
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    • 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.
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    • 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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    • Employee Health & Safety The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.
      • Workforce Health & Safety Workers involved in Exploration & Production (E&P) activities face significant health and safety risks because of the harsh working environments and the hazards of handling oil and gas. In addition to acute harms resulting from accidents, workers may develop chronic health conditions, including those caused by silica or dust inhalation, as well as mental health problems. A significant proportion of the workforce at oil and gas drilling sites consists of temporary workers and employees of oil and gas service entities. An entity’s ability to protect employee health and safety, and to create a culture of safety and well-being among all employees, may prevent accidents, mitigate costs, reduce operational downtime and enhance workforce productivity. Additional health and safety protocols may be needed to protect groups such as women and minorities in regions where they continue to face discrimination.
    • Business Model Resilience The category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
      • Reserves Valuation & Capital Expenditures Exploration and production (E&P) entities may be unable to extract a significant proportion of their proved and probable oil and gas reserves if greenhouse gas (GHG) emissions are controlled to limit global temperature increases. Entities with more carbon-intensive reserves and production and higher capital costs may face greater risks. Regulatory limits on GHG emissions, together with improved competitiveness of alternative energy technologies, could reduce global demand growth, and therefore reduce prices for oil and gas products. Extraction costs could increase with regulations that put a price on GHG emissions. These factors could affect the economic viability of oil and gas reserves. Regulatory actions that are more abrupt than anticipated, or those focusing on industries with high emissions, could impair asset values over a short period. Stewardship of capital resources and production decisions that consider near- and long-term trends related to climate change may mitigate potential asset impairment and maintain profitability and creditworthiness.
    • 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.
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    • 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 & Transparency Managing business ethics and maintaining an appropriate level of transparency in payments to governments or individuals are significant issues for Exploration & Production (E&P) entities. Relationships with governments are especially important to entities in the E&P industry since entities compete for access to oil and gas reserves. Anti-corruption, anti-bribery, and payments transparency laws and initiatives globally create regulatory mechanisms to reduce the risk of misconduct. Violations of these could result in significant one-time costs or higher compliance costs, whereas successful compliance with such regulations could avoid adverse outcomes. Enforcement of these laws could affect an entity’s social licence to operate. Entities with significant reserves or operations in corruption-prone countries could face increased risks. Entities must ensure their governance structures and business practices reduce the risks associated with corruption and wilful or unintentional participation in illegal or unethical payments, or with gifts to government officials or private individuals.
    • Management of the Legal & Regulatory Environment The category addresses a company’s approach to engaging with regulators in cases where conflicting corporate and public interests may have the potential for long-term adverse direct or indirect environmental and social impacts. The category addresses a company’s level of reliance upon regulatory policy or monetary incentives (such as subsidies and taxes), actions to influence industry policy (such as through lobbying), overall reliance on a favorable regulatory environment for business competitiveness, and ability to comply with relevant regulations. It may relate to the alignment of management and investor views of regulatory engagement and compliance at large.
      • Management of the Legal & Regulatory Environment The Exploration & Production (E&P) industry is subject to numerous sustainability-related regulations and a rapidly changing regulatory environment. Entities in the industry regularly participate in the regulatory and legislative process on a wide variety of environmental and societal issues, and they may do so directly or through representation by an industry association. Entities may participate in these processes to ensure industry views are represented in the development of regulations affecting the industry, as well as to represent shareholder interests. However, such attempts to influence environmental laws and regulations may have an adverse effect on entities’ reputations with stakeholders and ultimately affect the entity’s social licence to operate. Entities that can balance these tensions may be better positioned to respond to medium-to-long-term regulatory developments.
    • Critical Incident Risk Management The category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur.
      • Critical Incident Risk Management The Exploration & Production (E&P) industry faces significant hazards associated with exploration, development and production activities. Accidental releases of hydrocarbons or other hazardous substances can also have significant consequences for an entity’s workforce, as well as negative social and environmental externalities. In addition to effective process safety management practices, many entities prioritise developing a culture of safety to reduce the probability of accidents and other health and safety incidents. If accidents and other emergencies do occur, entities with a strong safety culture are often able to detect and respond to such incidents more effectively. A culture that engages and empowers employees and contractors to work with management to safeguard their own health, safety and well-being and prevent accidents may help entities reduce production downtime, mitigate costs, ensure workforce productivity and maintain their licence to operate.
  • Food Retailers & Distributors Remove
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    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
      • Fleet Fuel Management Entities in the Food Retailers & Distributors industry own and operate vehicle fleets to deliver products between its distribution and retail locations. The fuel consumption of vehicle fleets is a significant industry expense, both in terms of operating costs and associated capital expenditures. Fossil fuel consumption can contribute to environmental impacts, including climate change and pollution. These environmental impacts may affect food retailers and distributors through regulatory exposure. Efficiencies gained in fuel use can reduce costs, mitigate exposure to fossil fuel price volatility and limit the carbon footprint associated with storage and transportation. Short-term capital expenditures in fuel-efficient fleets and more energy efficient technologies may be outweighed by long-term operational savings and decreased exposure to regulatory risks.
      • Air Emissions from Refrigeration Emissions of refrigeration chemicals from equipment used to store and display perishable foods pose unique regulatory risks for the Food Retailers & Distributors industry. International regulations on hydrochlorofluorocarbons (HCFCs) aim to mitigate damage by HCFCs to the earth’s ozone layer. Additionally, many common HCFCs and hydrofluorocarbons (HFCs) are highly potent greenhouse gases (GHGs), which increases the industry’s exposure to climate change-related regulations. Regulators can assess penalties on entities that violate emissions standards. Entities may be required to upgrade or replace equipment, making capital expenditures to reduce emissions or replace existing refrigerants with potentially costlier but less environmentally-damaging alternatives.
    • Air Quality The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category.
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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 Food retail and distribution facilities are typically more energy-intensive than other types of commercial spaces. These facilities use energy predominately for refrigeration, heating, ventilation and air conditioning (HVAC), as well as lighting. Entities in the industry generally purchase the majority of consumed electricity, while some are beginning to generate energy on-site or add renewable energy into their energy mix. Energy production and consumption contribute to environmental impacts, including climate change and pollution, which have the potential to indirectly, yet materially, impact the operations of food retailers and distributors. Entities that manage to increase energy efficiency and use alternative energy sources may increase profitability by reducing expenses and decreasing risk.
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
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    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
      • Food Waste Management The Food Retailers & Distributors industry generates food waste at various stages of operation. Food waste includes edible or otherwise useful food that does not reach consumers, as well as foods that spoil or are damaged during transportation or stocking or while sitting on store shelves. For entities, food waste represents losses of both saleable merchandise and resources used in food production, including land, water, labour, energy and agricultural chemicals. Food waste also contributes to food insecurity and can generate greenhouse gas (GHG) emissions during landfill decomposition. Effective food waste management can present financial opportunities to reduce costs associated with inventory loss, as well as help improve food security by more efficiently diverting food resources for beneficial purposes.
    • Ecological Impacts The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.
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    • Human Rights & Community Relations The category addresses management of the relationship between businesses and the communities in which they operate, including, but not limited to, management of direct and indirect impacts on core human rights and the treatment of indigenous peoples. More specifically, such management may cover socio-economic community impacts, community engagement, environmental justice, cultivation of local workforces, impact on local businesses, license to operate, and environmental/social impact assessments. The category does not include environmental impacts such as air pollution or waste which, although they may impact the health and safety of members of local communities, are addressed in separate categories.
      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.
      • Data Security Through electronic payment transactions, food retailers establish a relationship of trust with consumers who share their personal financial data with them. Data breaches can occur through breaches of the physical payment technology, called point-of-sale breaches, as well as through attacks on cybersecurity infrastructure. Data breaches that result in the theft or loss of customers’ personal data undermine trust in an entity’s ability to securely manage confidential information. This loss of confidence could result in reduced number of customer visits, lower revenues and diminished brand value. Retailers with strong technological and managerial systems to avoid data breaches and respond to threats effectively can position themselves favourably with customers and reduce the risk of litigation and other costs.
    • 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.
      • Food Safety Maintaining product quality and safety is crucial for the Food Retailers & Distributors industry, since contamination by pathogens, hazardous substances or spoilage can present risks to human health. Contamination can occur at any stage in the food value chain, including food production, processing, transportation, distribution and retail. Although entities may not be directly responsible for all food safety and recall incidents, they are involved in the process and still may experience consequences associated with incidents, such as financial ramifications, damage to brand value, lower revenues and increased costs. Measures to prevent spoilage and contamination include temperature control, frequent food inspection and careful supplier selection.
    • Customer Welfare The category addresses customer welfare concerns over issues including, but not limited to, health and nutrition of foods and beverages, antibiotic use in animal production, and management of controlled substances. The category addresses the company’s ability to provide consumers with manufactured products and services that are aligned with societal expectations. It does not include issues directly related to quality and safety malfunctions of manufactured products and services, but instead addresses qualities inherent to the design and delivery of products and services where customer welfare may be in question. The scope of the category also captures companies’ ability to prevent counterfeit products.
      • Product Health & Nutrition Consumer awareness of food content and nutritional value and their relationship to health, shapes the industry’s competitive landscape. Demand for food products that are made with natural ingredients, certified to be organic, low-fat or low-sugar, or produced without genetically modified organisms (GMOs) can create opportunities for entities. Although the links between consumer health and some foods are not well-established, consumers have nonetheless shown preferences for food categories that are perceived to be healthier than others. Food retailers that recognise the risks and opportunities presented by consumers’ shifting preferences and adapt to consumer demands may be better positioned to capture opportunities for increasing revenue and market share.
    • 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.
      • Product Labelling & Marketing Communication with consumers through product labelling and marketing is an important facet of food retail. The accuracy and depth of information presented in food labelling is important to shoppers and regulators. Labelling is especially relevant for the sale of private-label products manufactured for food retailers, with direct consequences on brand reputation. To inform purchasing decisions, consumers may seek additional information about product ingredients, such as the presence of genetically modified organism (GMO) content or other ingredients considered healthy or nutritious. These issues can affect competition among entities in the industry, since entities may be subject to litigation or criticism resulting from making misleading statements or failing to adapt to consumer demand for increased labelling transparency. These factors can have consequences on retailers’ brand value and revenue growth. Regulations addressing the accurate labelling of products and their ingredients present an additional risk of penalties or litigation for entities.
    • 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 Food Retailers & Distributors industry employs many hourly workers. Low average wages in the industry, which help entities maintain low prices for products, may result in labour-related risks. Worker dissatisfaction with wages and benefits, combined with high unionisation rates, can result in strikes which can in turn lead to business disruption and reputational damage. Additionally, entities that are involved in gender and racial discrimination cases can experience costly financial settlements. Entities may benefit from taking a long-term perspective on managing workers, including their pay and benefits, in a way that protects the rights of workers and enhances their productivity and strengthens the entity’s reputation and brand value.
    • Employee Health & Safety The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.
      None
    • Business Model Resilience The category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
      None
    • 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.
      • Management of Environmental & Social Impacts in the Supply Chain Food retailers and distributors source merchandise from a wide range of manufacturers. These suppliers face a myriad of sustainability-related challenges that include resource conservation, water scarcity, animal welfare, fair labour practices and climate change. When poorly managed, these issues can affect the price and availability of food. Additionally, consumers increasingly are concerned with the production methods, origins and externalities associated with the foods they purchase, which may affect an entity’s reputation. Food retailers and distributors also can work with suppliers on packaging design to generate cost savings in transport, improve brand reputation and reduce environmental impact. Entities that can manage effectively product supply risks by assessing and engaging with suppliers, implementing sustainable sourcing guidelines and enhancing supply chain transparency positioned more advantageously to improve supply chain resiliency, mitigate reputational risks, and potentially increase consumer demand or capture new market opportunities.
    • 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
    • Management of the Legal & Regulatory Environment The category addresses a company’s approach to engaging with regulators in cases where conflicting corporate and public interests may have the potential for long-term adverse direct or indirect environmental and social impacts. The category addresses a company’s level of reliance upon regulatory policy or monetary incentives (such as subsidies and taxes), actions to influence industry policy (such as through lobbying), overall reliance on a favorable regulatory environment for business competitiveness, and ability to comply with relevant regulations. It may relate to the alignment of management and investor views of regulatory engagement and compliance at large.
      None
    • Critical Incident Risk Management The category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur.
      None

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