Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Oil & Gas – Services Oil and gas services entities drill under contract, manufacture equipment, or provide support services. Drilling and drilling-support entities drill for oil and natural gas on-shore and off-shore on a contract basis for oil and natural gas exploration and production (E&P) entities. For on-shore exploration and production, entities in the oilfield services segment manufacture equipment used in the extraction, storage and transportation of oil and natural gas. For off-shore, entities in this segment may manufacture jack-up rigs, semisubmersible rigs, drill ships and a range of other exploration equipment. They also provide support services such as seismic surveying, equipment rental, well cementing and well monitoring. These services commonly are provided on a contractual basis, and the customer purchases or leases the materials and equipment from the service provider. Service entities also may provide personnel or subject matter expertise as part of their scope of service. The contractual relationship between oil and gas services entities and their customers plays a significant role in determining the material impacts of their sustainability performance. Besides the rates charged, entities compete based on their operational and safety performance, technology and process offerings, project management performance, and reputation.
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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 (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.
  • Oil & Gas – Services 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).
      • Emissions Reduction Services & Fuels Management Although direct greenhouse gas (GHG) emissions and associated regulatory risks are relatively low for Oil & Gas - Services providers relative to other industries, emissions from the operations of their customers—the Exploration & Production (E&P) entities—can be significant. Emissions include GHGs that can contribute to climate change as well as other air pollutants that can have significant localised human health and environmental impacts. Increasing regulation and high costs of fuels associated with these emissions present substantial risk to E&P entities. Entities are seeking ways to lower their emissions, including converting pumps and engines to run on natural gas and electricity instead of diesel fuel. Oil & Gas - Services entities compete for contracts partly based on providing innovative, efficient technologies that can help E&P entities reduce operating costs and improve process efficiencies. Services entities can gain a competitive advantage, grow revenue and secure market share by providing customers with services and equipment to reduce GHG, fugitive and flared emissions and fuel consumption.
    • 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 Services Oil and gas development often requires large quantities of water, exposing producers to the risks of water scarcity, water use regulations and related cost increases, particularly in water-stressed regions. Producers also must manage wastewater disposal risks and costs. As such, service entities that develop superior technologies and processes, such as closed-loop water recycling systems to reduce customers’ water consumption and disposal costs, may gain market share and increase revenue, because drilling and wastewater management can be a significant competitive factor for their customers.
    • 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.
      • Chemicals Management Oil & Gas – Services entities produce oilfield chemicals as well as drilling and hydraulic fracturing fluids based on demand from Exploration & Production (E&P) entities. Although leaks from a properly drilled and completed well are rare, contamination of local water resources can result from contact with hydraulic fracturing fluids and produced water. Contamination may arise from issues related to poor well integrity. Public concerns about some chemicals used in hydraulic fracturing fluids have, in some regions, resulted in fracturing bans, legislative proposals and other regulations to mandate disclosure of chemicals used. The precise chemical composition of hydraulic fracturing fluids is often proprietary, and entities compete to create the most effective formulas. Because of public and regulatory attention to the potential hazards of drilling fluids, entities that effectively manage well development and asset integrity issues, the production and use of non-hazardous fracking fluids, and the per well reduction of drilling fluid volumes, may increase their market share, grow revenues and reduce the regulatory risk affecting their products.
    • 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.
      • Ecological Impact Management Oil and gas exploration and development activities and associated services and support activities can have significant impacts on biodiversity and ecosystems. Entities operating sites in ecologically sensitive areas or that are resource-intensive operations must effectively manage the disposal of drilling and associated wastes, well decommissioning, land use, and potential fuel spills. Producers face regulatory risks and permitting barriers to protect ecosystems from potential issues related to site development, drilling, underground waste injection, well decommissioning and site remediation. Entities that offer cost-effective, efficient production and decommissioning technologies that mitigate biodiversity impacts by reducing land use, drilling wastes and spills can decrease the associated risks for their customers and gain a competitive advantage.
    • 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 Workers in the Oil & Gas – Services industry may face significant health and safety risks related to the harsh working environments and handling potentially volatile hydrocarbons and hazardous wastes. In addition to acute impacts resulting from accidents, workers may develop chronic health conditions, such as 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 entities in the Oil & Gas – Services industry. Health impacts on, and the safety performance of, such workers can affect entities directly by adversely affecting worker productivity and increasing costs. Entities compete based on their reputation and ability to perform activities consistently and safely. Customers evaluate accidents, spills, injuries and fatalities as important factors in awarding contracts to entities.
    • 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.
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    • Product Design & Lifecycle Management The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.
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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 & Payments Transparency With operations around the world, entities in the Oil & Gas – Services industry interact with many government and local officials, either directly or through agents, to secure contracts with state-owned oil entities and multinational corporations. Bribery, corruption and the transparency of payments to governments may be significant issues, depending on the region and jurisdiction. Anti-corruption, anti-bribery, and payments transparency laws and initiatives 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. Entities are under pressure to ensure their governance structures and practices can monitor and manage the risks associated with corruption, 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 Oil & Gas – Services 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 Entities in the Oil & Gas – Services industry are subject to significant risks associated with low-probability, high-consequence events associated with oil and gas exploration, development and production activities. Such events may result in multiple fatalities, significant property damage or significant adverse effects on the environment. Entities may be affected indirectly through safety incidents or emergencies affecting their Exploration & Production (E&P) industry clients. Significant incidents can have wide-ranging negative social and environmental consequences, for which both E&P and Services entities may be held liable. Entities compete based on their reputation and ability to perform activities on a consistently safe basis. In addition to effective process safety management practices, many entities prioritise developing a strong 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 and entities in the E&P industry to safeguard their own health, safety and well-being, and to prevent accidents, is likely to help entities reduce risks to their financial value.
  • Asset Management & Custody Activities 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).
      None
    • 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
    • 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.
      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.
    • 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
    • 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.
    • 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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