Industry Comparison

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Current language: English (2023)

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  • Iron & Steel Producers The Iron & Steel Producers industry primarily consists of entities producing iron and steel in mills and foundries. The steel producers segment produces iron and steel products from its own mills. These products include flat-rolled sheets, tin plates, pipes, tubes, and products made of stainless steel, titanium and high alloy steels. Iron and steel foundries, which cast various products, typically purchase iron and steel from other entities. The industry also includes metal service centres and other metal merchant wholesalers, which distribute, import or export ferrous products. Though entities are developing alternative processes, steel production primarily relies on two primary methods: the basic oxygen furnace (BOF), which uses iron ore as an input, and the electric arc furnace (EAF), which uses scrap steel. Many entities in the industry operate on an international scale. Note: With a few exceptions, most entities do not mine their own ore to manufacture steel and iron products. There exists a separate standard for the Metals & Mining (EM-MM) industry.
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  • Insurance The Insurance industry provides both traditional and non-traditional insurance-related products. Traditional policy lines include property, life, casualty and reinsurance. Non-traditional products include annuities, alternative risk transfers and financial guarantees. Entities in the insurance industry also engage in proprietary investments. Insurance entities generally operate within a single segment in the industry, for example, property and casualty, although some large insurance entities have diversified operations. Similarly, entities may vary based on the level of their geographical segmentation. Whereas large entities may underwrite insurance premiums in many countries, smaller entities generally operate in a single country or jurisdiction. Insurance premiums, underwriting revenue and investment income drive industry growth, while insurance claim payments present the most significant cost and source of uncertainty for profits. Insurance entities provide products and services that enable the transfer, pooling and sharing of risk necessary for a well-functioning economy. Insurance entities, through their products, can also create a form of moral hazard, reducing incentives to improve underlying behaviour and performance, and thus contributing to sustainability-related impacts. Like other financial institutions, insurance entities face risks associated with credit and financial markets. Within the industry, regulators have identified entities that engage in non-traditional or non-insurance activities, including credit default swaps (CDS) protection and debt securities insurance, as being more vulnerable to financial market developments, and therefore more likely to amplify or contribute to systemic risk. As a result, some insurance entities may be designated as Systemically Important Financial Institutions, thus exposing them to increased regulation and oversight.
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Relevant Issues for both Industries (11 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.
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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 Iron and steel production generates significant direct greenhouse gas (GHG) emissions, primarily carbon dioxide and methane, from production processes and on-site fuel combustion. Although technological improvements have reduced the GHG emissions per tonne of steel produced, steel production remains carbon-intensive compared to other industries. Regulatory efforts to reduce GHG emissions in response to the risks posed by climate change may result in additional regulatory compliance costs and risks for iron and steel entities because of climate change mitigation policies. Entities can achieve operational efficiencies through the cost-effective reduction of GHG emissions. Capturing such efficiencies can mitigate the potential financial effects of increased fuel costs from regulations that limit—or put a price on—GHG emissions.
    • 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 Iron and steel production typically generates criteria air pollutants, volatile organic compounds (VOCs) and hazardous air pollutants, which can have significant localised public health impacts. Of particular concern are sulphur oxides, nitrogen dioxide, lead, carbon monoxide and manganese, as well as particles such as soot and dust, released during production. Technological innovation and continuous improvements in steel-making processes have reduced air pollutants significantly from the Iron & Steel Producers industry. However, air pollutants remain a concern because of increased regulatory and public concern about air pollution, as well as expansion of steel production in emerging markets. In emerging markets, regulatory efforts to curb air pollution may constrain iron and steel production. Active management of facility emissions through industry best practices implementation across global operations can facilitate the transition to sustainable steel production, reducing costs and potentially enhancing operational efficiency.
    • 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 The production of steel requires significant energy, sourced primarily from the direct fossil fuel combustion as well as energy purchased from the grid. Energy-intense production has implications for climate change, and electricity purchases from the grid can result in indirect Scope 2 emissions. The choice between various production processes—electric arc furnaces and integrated basic oxygen furnaces—can influence whether an entity uses fossil fuels or purchases electricity. This decision, together with the choice between using coal versus natural gas or on-site versus grid-sourced electricity, may influence both the costs and reliability of energy supply. Affordable, easily accessible and reliable energy is an important industry competitive factor. Energy costs account for a substantial portion of iron and steel manufacturing costs. How an iron and steel entity manages its energy efficiency, its reliance on various types of energy and associated sustainability risks, and its ability to access alternative sources of energy can influence its profitability.
    • 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 Steel production requires substantial volumes of water. Entities face increasing operational, regulatory and reputational risks associated with water scarcity, costs of water acquisition, regulations on effluents or amount of water used, and competition with local communities and other industries for limited water resources. These risks are particularly likely to affect regions where water is scarce, resulting in water availability constraints and price volatility. Entities unable to secure a stable water supply could face production disruptions, while rising water prices could directly increase production costs. Consequently, entities adopting technologies and processes to decrease reduce water consumption may reduce operating risks and costs by mitigating the operational impacts of regulatory changes, water supply shortages and community-related disruptions.
    • 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.
      • Waste Management Although waste reclamation rates in steel production are high, the industry generates significant quantities of hazardous wastes. Slag, dusts and sludges constitute the three main industry waste types. These by-products often are recycled internally or sold to other industries. However, process wastes such as electric arc furnace dust, which may be regulated as a hazardous material because of its heavy metal content, can have significant environmental and human health impacts, present a regulatory risk, and result in additional operating costs for entities. Risks related to the long-term impacts of waste disposal may result in significant costs, including those associated with monitoring and managing contaminated off-site disposal properties, for which jurisdictional authorities may hold iron and steel producers responsible for remediation and restoration activities. Entities that reduce waste streams, hazardous waste streams in particular, and recycle or sell non-hazardous by-products, could mitigate regulatory risks and reduce costs while increasing revenues.
    • 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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    • 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 Iron and steel production processes can present significant risks to employees and contractors working in iron and steel plants. Given the high temperatures and heavy machinery involved, worker injuries and fatalities are a matter of serious concern to iron and steel producers. Given the hazardous work environment, the industry has relatively high fatality rates requiring a strong safety culture and comprehensive health and safety policies. Although accident rates in the industry are in decline, worker injuries and fatalities can result in regulatory penalties, negative publicity, low worker morale and productivity, and increased healthcare and compensation costs.
    • 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.
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    • 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.
      • Supply Chain Management Iron ore and coal are critical raw material inputs to the steel production process. Iron ore mining and coal production are resource-intensive processes. Mineral extraction often has substantial environmental and social impacts adversely affecting local communities, workers and ecosystems. Community protests, legal or regulatory action, or increased regulatory compliance costs or penalties can disrupt mining operations. Iron and steel entities could face supply disruptions as a result, or in some cases, also may be subject to regulatory penalties associated with the environmental or social impact of the mining entity supplier. Minimising such risks through appropriate supplier screening, monitoring and engagement, iron and steel producers may manage their direct critical raw materials suppliers proactively to ensure they are not engaged in illegal or otherwise environmentally or socially damaging practices.
    • Physical Impacts of Climate Change The category addresses the company’s ability to manage risks and opportunities associated with direct exposure of its owned or controlled assets and operations to actual or potential physical impacts of climate change. It captures environmental and social issues that may arise from operational disruptions due to physical impacts of climate change. It further captures socio-economic issues resulting from companies failing to incorporate climate change consideration in products and services sold, such as insurance policies and mortgages. The category relates to the company’s ability to adapt to increased frequency and severity of extreme weather, shifting climate, sea level risk, and other expected physical impacts of climate change. Management may involve enhancing resiliency of physical assets and/or surrounding infrastructure as well as incorporation of climate change-related considerations into key business activities (e.g., mortgage and insurance underwriting, planning and development of real estate projects).
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    • Systemic Risk Management The category addresses the company’s contributions to or management of systemic risks resulting from large-scale weakening or collapse of systems upon which the economy and society depend. This includes financial systems, natural resource systems, and technological systems. It addresses the mechanisms a company has in place to reduce its contributions to systemic risks and to improve safeguards that may mitigate the impacts of systemic failure. For financial institutions, the category also captures the company’s ability to absorb shocks arising from financial and economic stress and meet stricter regulatory requirements related to the complexity and interconnectedness of companies in the industry.
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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).
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    • 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.
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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.
      None
    • 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.
      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 Insurance products play an important societal role in alleviating unexpected economic shocks, allowing individual policyholders to reduce the financial consequences of events such as illnesses, accidents and deaths. However, unclear insurance policies, ambiguous product terms and potentially misleading sales tactics may erode brand reputation, spur legal disputes, and reduce the number of services and products an entity can offer. Regulators may deem some policies overly complex and unsuitable for customers. Moreover, entities compete based on financial strength, price, brand reputation, services offered and customer relationships. Dissatisfied customers may reduce or avoid insurance coverage, potentially leading to negative financial outcomes such as personal bankruptcies. While financial regulators continue to emphasise consumer protection and accountability, entities that maintain transparent policy terms and sell products to customers best suited to them may better maintain their brand reputation, avoid regulatory scrutiny and protect shareholder value. Failure to inform customers about products in a clear and transparent manner may result in increased consumer complaints, customer churn, or regulatory fines and settlements.
    • 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
    • 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 Insurance entities must invest capital to preserve accumulated premium revenues equivalent to expected policy claim pay-outs and maintain long-term asset-liability parity. Because environmental, social and governance (ESG) factors increasingly have a material impact on the performance of corporations and other assets, insurance entities increasingly must incorporate these factors into their investment management. Failure to address these issues may diminish risk-adjusted portfolio returns and limit an entity’s ability to issue claim payments. Entities, therefore, should enhance disclosure on how they incorporate ESG factors, including climate change and natural resource constraints, into the investment of policy premiums and how they affect the portfolio risk.
      • Policies Designed to Incentivise Responsible Behaviour Advances in technology and the development of new policy products have allowed insurance entities to limit claim payments while encouraging responsible behaviour. The industry is subsequently in a unique position to generate positive social and environmental externalities. Insurance entities can incentivise healthy lifestyles and safe behaviour as well as develop sustainability-related projects and technologies, such as those focused on renewable energy, energy efficiency and carbon capture. As the renewable energy industry continues to grow, insurance entities may seek related growth opportunities by underwriting insurance in this area. Additionally, policy clauses may encourage customers to incorporate environmental, social and governance (ESG) factors to mitigate overall underwriting portfolio risk, which may reduce insurance pay-outs over the long term. Therefore, disclosure on products related to energy efficiency and low carbon technology, as well as discussion of how entities incentivise health, safety or environmentally responsible actions or behaviours, may assist investors in assessing how insurance entities incentivise responsible behaviour.
      • Financed Emissions Entities participating in insurance 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 insurance 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 financial activities over time.
    • 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
    • Physical Impacts of Climate Change The category addresses the company’s ability to manage risks and opportunities associated with direct exposure of its owned or controlled assets and operations to actual or potential physical impacts of climate change. It captures environmental and social issues that may arise from operational disruptions due to physical impacts of climate change. It further captures socio-economic issues resulting from companies failing to incorporate climate change consideration in products and services sold, such as insurance policies and mortgages. The category relates to the company’s ability to adapt to increased frequency and severity of extreme weather, shifting climate, sea level risk, and other expected physical impacts of climate change. Management may involve enhancing resiliency of physical assets and/or surrounding infrastructure as well as incorporation of climate change-related considerations into key business activities (e.g., mortgage and insurance underwriting, planning and development of real estate projects).
      • Physical Risk Exposure Catastrophic losses associated with extreme weather events will continue to have a material, adverse effect on the Insurance industry. The extent of this effect may evolve as climate change increases the frequency and severity of both modelled and non-modelled natural catastrophes, including hurricanes, floods and droughts. Failure to appropriately understand environmental risks, and price them into the underwritten insurance products, may result in higher-than-expected claims on policies. Therefore, insurance entities that incorporate climate change considerations into their underwriting process for individual contracts, as well as the management of entity-level risks and capital adequacy, may be better positioned to create value over the long-term. Enhanced disclosure of an entity’s approach to incorporating these factors, in addition to quantitative data such as the probable maximum loss and total losses attributable to insurance pay-outs, may provide investors with the information necessary to assess current and future performance on this issue.
    • Systemic Risk Management The category addresses the company’s contributions to or management of systemic risks resulting from large-scale weakening or collapse of systems upon which the economy and society depend. This includes financial systems, natural resource systems, and technological systems. It addresses the mechanisms a company has in place to reduce its contributions to systemic risks and to improve safeguards that may mitigate the impacts of systemic failure. For financial institutions, the category also captures the company’s ability to absorb shocks arising from financial and economic stress and meet stricter regulatory requirements related to the complexity and interconnectedness of companies in the industry.
      • Systemic Risk Management Entities in the Insurance industry have the potential to pose, amplify or transmit a threat to the financial system. The size, interconnectedness and complexity of entities highlight the industry’s exposure to systemic risk. Regulators have identified entities that engage in non-traditional or non-insurance-related activities as being more vulnerable to financial market developments and subsequently more likely to contribute to systemic risk. As a result, entities may be designated as Systemically Important Financial Institutions. Central banking systems in various jurisdictions may subject such entities to stricter prudential regulatory standards and oversight. Such entities may face stricter limits on their risk-based capital, leverage, liquidity and credit exposure. In addition, regulators may require entities to maintain a plan for rapid and orderly dissolution in the event of financial distress. Regulatory compliance can be costly, and failure to meet qualitative and quantitative regulatory performance thresholds could lead to substantial penalties. To demonstrate how these risks are being managed, entities should disclose important aspects of their systemic risk management and their ability to meet stricter regulatory requirements.

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