Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Processed Foods Processed Foods industry entities process and package foods such as bread, frozen foods, snack foods, pet foods and condiments for retail consumer consumption. Typically, these products are made ready to consume, are marketed for retail consumers and can be found on food retailers’ shelves. The industry is characterised by large and complex ingredient supply chains, because many entities source ingredients from around the world. Large entities operate globally, and international opportunities are driving growth.
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  • Real Estate Real Estate industry entities own, develop and operate income-producing real estate assets. Entities in this industry commonly are structured as real estate investment trusts (REITs) and operate in a wide range of real estate industry segments, including residential, retail, office, health care, industrial and hotel properties. REITs typically participate in direct real estate asset ownership, thereby providing investors with the opportunity to obtain real estate exposure without direct asset ownership and management. Although REITs often concentrate on individual Real Estate industry segments, many REITs diversify investments across multiple property types.
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Relevant Issues for both Industries (9 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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    • 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 Processed Foods industry is reliant on energy and fuel as primary inputs for value creation in manufacturing food products. Energy is needed to operate large manufacturing facilities for cooking, refrigeration and packaging. Energy production and consumption contributes to significant environmental impacts, including climate change and pollution, which have the potential indirectly, yet materially, to affect processed food entity operations. Energy efficiency in production and distribution can mitigate exposure to volatile energy costs and limit an entity’s contribution to direct and indirect greenhouse gas (GHG) emissions. Producers may be able to reduce the risk posed by volatile fossil fuel energy costs—particularly natural gas, which the industry uses heavily—by diversifying their energy portfolio across a range of sources. Decisions regarding alternative fuels use, renewable energy and on-site generation of electricity versus purchasing from the grid, may influence both the costs and reliability of the energy supply.
    • 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 Processed Foods entities rely on a reliable water supply for cooking, processing and cleaning finished goods. Additionally, entities in the industry generate and must manage the wastewater discharge from processing activities. As water scarcity becomes an issue of increasing importance, processed foods entities—operating in water-stressed regions—may face increasing operational risks. Entities in the industry may face higher operational costs as well as water shortages because of the physical availability or more stringent regulations. Entities can manage water-related risks and opportunities through capital investments and assessment of facility locations relative to water scarcity risks, improvements to operational efficiency, and partnerships with regulators and communities on issues related to water access and effluent.
    • 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 As it relates to production quality, spoilage, contamination, supply chain traceability and allergy labelling, food safety can significantly affect entities in the Processed Foods industry. Food safety recalls can happen for numerous reasons, including packaging defects, food contamination, spoilage and mislabelling. Food safety issues that arise within an entity’s supply chain often result in recalls of final products, with consequences on the brand reputation, operations and revenue of entities. Supply chain traceability is a major concern for entities in the industry. Poor management of food quality and safety may impair brand value, reduce revenues and increase costs associated with recalls, fines, lost inventory or litigation. Obtaining food safety certifications and ensuring suppliers meet food safety guidelines may help entities in the industry safeguard product safety and communicate the quality of their products to retailers and consumers.
    • 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.
      • Health & Nutrition Nutritional and health concerns such as obesity, ingredient safety and nutritional value are important factors in how entities compete with one another. The health and nutritional characteristics of products and ingredients are of growing concern to both consumers and regulators, increasing the potential for these issues to affect an entity’s reputation and licence to operate. New regulations, including taxes on processed foods, may affect industry profitability and pose long-term risks in the form of reduced demand for the industry’s products. Entities that adapt to changing consumer preferences to promote healthier, more nutritious offerings may be able to address consumer demand in emerging market segments and avoid risks associated with potential regulation.
    • 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 the Processed Foods industry. The accuracy and depth of information presented in food labelling is important to consumers and regulators. Labelling regulations require specific and detailed product information to ensure food safety and inform consumers of the nutritional content of products. To inform purchasing decisions, consumers may seek additional information about product ingredients, such as the presence of genetically modified organism (GMO) content, or about the methods used in product manufacturing. The marketing practices of entities are another area of public concern, especially those targeting children or presenting potentially false or misleading nutritional information. Product labelling and marketing issues can affect competition among entities, since entities may be subject to litigation or criticism resulting from misleading statements or failing to adapt to consumer demand for increased labelling transparency. Additionally, adherence to product labelling and marketing regulations may introduce near-term costs and may reduce the risk of penalties or litigation. All these factors can impact an entity’s brand value, operating costs and revenue growth.
    • 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.
      • Packaging Lifecycle Management Packaging materials represent a major business cost and contribute to the environmental footprint of entities in the Processed Foods industry. Each stage of a package’s lifecycle, including design, transportation and disposal, presents unique environmental challenges and opportunities. Entities are also affected by legislation regarding allowable packaging materials or packaging end-of-life management. Entities can work with packaging manufacturers on packaging design to reduce costs, improve brand reputation and reduce the environmental impact of packaging. Innovations such as developing lightweight materials may also result in reduced goods transportation costs. Other innovations can improve end-of-life management of products, such as using recyclable or compostable materials, which may mitigate potential risks related to costs and compliance.
    • 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.
      • Environmental & Social Impacts of Ingredient Supply Chain Entities in the Processed Foods industry manage global supply chains to source a wide range of ingredient inputs. How entities screen, monitor and engage with suppliers on environmental and social topics affects the ability of entities to maintain steady supplies and manage price fluctuations. Supply chain management issues related to labour and environmental practices, ethics or corruption also may result in regulatory fines or increased long-term operational costs for entities. The consumer-facing nature of the industry increases the reputational risks associated with supplier performance. Entities can engage with important suppliers to manage environmental and social risks to improve supply chain resiliency, mitigate reputational risks, potentially increase consumer demand, or capture new market opportunities.
    • Materials Sourcing & Efficiency The category addresses issues related to the resilience of materials supply chains to impacts of climate change and other external environmental and social factors. It captures the impacts of such external factors on operational activity of suppliers, which can further affect availability and pricing of key resources. It addresses a company’s ability to manage these risks through product design, manufacturing, and end-of-life management, such as by using of recycled and renewable materials, reducing the use of key materials (dematerialization), maximizing resource efficiency in manufacturing, and making R&D investments in substitute materials. Additionally, companies can manage these issues by screening, selection, monitoring, and engagement with suppliers to ensure their resilience to external risks. It does not address issues associated with environmental and social externalities created by operational activity of individual suppliers, which is covered in a separate category.
      • Ingredient Sourcing Entities in the Processed Foods industry source a wide range of ingredients, largely agricultural inputs, from global suppliers. The industry’s ability to source ingredients, and at some price points, fluctuates with supply availability, which may be affected by climate change, water scarcity, land management and other resource scarcity considerations. This exposure may cause price volatility which may affect entity profitability. Climate change, water scarcity and land-use restrictions present risks to an entity’s long-term ability to source essential materials and ingredients. Entities that source ingredients which are more productive and less resource-intensive, or coordinate with suppliers to increase their adaptability to climate change and other resource scarcity risks, may reduce price volatility and supply disruptions.
    • 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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    • 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 Real estate assets consume significant amounts of energy for space heating, ventilating, air conditioning, water heating, lighting and using equipment and appliances. The type and magnitude of energy used and strategies for energy management are dependent upon the real estate asset class, among other factors. Generally, grid electricity is the predominant form of consumed energy, though on-site fuel combustion and renewable energy production also serve important roles. Energy costs may be borne by entities or property occupants; either way, energy management is a significant industry issue. To the extent that the real estate owner assumes direct responsibility for energy costs, such costs often represent significant operating costs, indicating the importance of energy management. Energy pricing volatility and a general trend of electricity price increases, energy-related regulations, potentially wide variations in energy performance in existing building stock, and opportunities for efficiency improvements through economically attractive capital investments all show the importance of energy management. Energy costs assumed by occupants, either in whole or in part, are nonetheless likely to affect entities through various channels. Building energy performance is a notable driver of tenant demand, because it allows them to control operating costs, mitigate potential environmental impacts, and, often just as importantly, maintain a reputation for resource conservation. Additionally, real estate owners may be exposed to energy-related regulations even if energy costs are the occupants’ responsibility. Overall, entities that effectively manage asset energy performance may realise reduced operating costs and regulatory risks, as well as increased tenant demand, rental rates and occupancy rates—all of which drive revenue and asset value appreciation. Improving energy performance is dependent upon property type and location, target tenant market, local building codes, physical and legal opportunities to deploy distributed renewable energy, the ability to measure consumption, and existing building stock, among other factors.
    • 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 Buildings consume significant amounts of water in their operations, through water fixtures, building equipment, appliances and irrigation. Water consumption operating costs may be significant depending on property type, tenant operations, geographical locations and other factors. Entities can be responsible for a building’s water costs, or common area water costs, though entities commonly allocate all, or a portion, of these costs to occupants. In these arrangements, water management through tenant demand and regulatory exposure continues to be important. Tenants may assess real estate asset water efficiency to control operating costs, mitigate environmental impacts of operations, and, often just as importantly, develop a reputation for resource conservation. Additionally, real estate owners may comply with water-related regulations even if water costs are the occupants’ responsibility. Overall, entities that effectively manage asset water efficiency, even if they bear no direct water costs, may realise reduced operating costs and regulatory exposure, as well as increased tenant demand, rental rates and occupancy rates—all of which drive revenue and asset value appreciation. Long-term historic water expense increases and expectations of continued increases because of overconsumption and constrained supplies resulting from population growth and shifts, pollution and climate change show the importance of water management. Improving asset water efficiency is dependent upon the property type, water availability, target tenant market, local building codes, the ability to measure consumption and the existing building stock, among other factors.
    • 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.
      None
    • 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.
      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.
      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.
      • Management of Tenant Sustainability Impacts Real estate assets generate significant sustainability impacts, including resource consumption (energy and water), waste generation and impacts on occupant health through indoor environmental quality. While entities own real estate assets, the tenant operations of such assets dominate the sustainability impacts produced by the built environment. Tenants may design and construct leased spaces according to their operating needs. In turn, their operations consume significant amounts of energy and water, generate waste, and impact the health of those living, working, shopping, or visiting the properties. While these sustainability impacts often are often generated by tenant operations and activities, real estate owners play an important role in influencing tenant sustainability impacts. The way entities in the industry structure their agreements, contracts and relationships with tenants may be instrumental in managing the sustainability impacts of their tenants effectively, and ultimately, the impacts of their assets. Managing tenant sustainability impacts may include mitigating the problem of split incentives by aligning both parties’ financial interests with sustainability outcomes, establishing systematic measurement and communication of resource consumption data, creating shared performance goals, and mandating minimum sustainability performance or design requirements, among other strategies. Effective management of tenant sustainability impacts, particularly related to energy, water and indoor environmental quality, may drive asset value appreciation, increase tenant demand and satisfaction, decrease direct operating costs, or decrease risks related to building codes and regulations.
    • Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
      None
    • Materials Sourcing & Efficiency The category addresses issues related to the resilience of materials supply chains to impacts of climate change and other external environmental and social factors. It captures the impacts of such external factors on operational activity of suppliers, which can further affect availability and pricing of key resources. It addresses a company’s ability to manage these risks through product design, manufacturing, and end-of-life management, such as by using of recycled and renewable materials, reducing the use of key materials (dematerialization), maximizing resource efficiency in manufacturing, and making R&D investments in substitute materials. Additionally, companies can manage these issues by screening, selection, monitoring, and engagement with suppliers to ensure their resilience to external risks. It does not address issues associated with environmental and social externalities created by operational activity of individual suppliers, which is covered in a separate category.
      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).
      • Climate Change Adaptation Climate change affects entities in the industry via frequent or high-impact extreme weather events and changing climate patterns. How an entity structures its business model to incorporate assessments of climate change risks, and the adaptation to such risks, may increasingly be relevant to entity value over the long-term. More specifically, investment strategies with assets located on floodplains and in coastal regions exposed to inclement weather may require increased risk mitigation and business model adaptation to long-term climate change. These strategies are especially important considering the long-term challenges associated with flood insurance rates, the financial stability of government-subsidised flood insurance programs, and financing stipulations or other creditor concerns. Besides insurance, other risk mitigation measures include improvements to physical asset resiliency and lease terms that transfer risk to tenants, although these measures can create their own costs and risks for real estate entities. To ensure long-term growth, entities must implement comprehensive climate change adaptation strategies, account for trade-offs between various risk mitigation strategies, and integrate all projected cost and benefit considerations over the long-term.

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