Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • 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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  • Alcoholic Beverages Alcoholic Beverages industry entities brew, distil and manufacture various alcoholic beverages including beer, wine and liquor. Entities in this industry transform agricultural products including sugar, barley and corn, into finished alcoholic beverages. The largest entities have global operations with portfolios of man branded products. Levels of vertical integration within the industry vary because of regulation in different markets. Breweries generally have multiple manufacturing facilities to provide access to different markets, while vintners and distillers typically are located where they have a history of production.
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Relevant Issues for both Industries (8 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.
  • Asset Management & Custody Activities Remove
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
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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.
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    • Selling Practices & Product Labeling The category addresses social issues that may arise from a failure to manage the transparency, accuracy, and comprehensibility of marketing statements, advertising, and labeling of products and services. It includes, but is not limited to, advertising standards and regulations, ethical and responsible marketing practices, misleading or deceptive labeling, as well as discriminatory or predatory selling and lending practices. This may include deceptive or aggressive selling practices in which incentive structures for employees could encourage the sale of products or services that are not in the best interest of customers or clients.
      • 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 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.
    • Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
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    • 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
    • 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.
  • Alcoholic Beverages Remove
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management Entities in the Alcoholic Beverages industry rely on both fuel and purchased electricity as critical inputs. Fossil fuel and electrical energy consumption can contribute to negative environmental impacts, including climate change and pollution. These impacts have the potential to affect the value of entities in this industry since greenhouse gas (GHG) emissions regulations and new incentives for energy efficiency and renewable energy could result in increased fossil fuels and conventional electricity price volatility, while making alternative sources more cost-competitive. Entities that manage for increased energy efficiency and use alternative energy sources may increase profitability by reducing both expenses and risks.
    • 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 Water management includes an entity’s direct water use, exposure to water scarcity and management of wastewater. Entities in the Alcoholic Beverages industry use a large amount of water in their operations, since water is a key input for their finished products. Given alcoholic beverage entities’ heavy reliance on large volumes of clean water and water scarcity is increasing in different regions globally, entities may be exposed to supply disruptions that could significantly impact operations and increase costs. Entities operating in water-stressed regions that fail to address local water concerns may risk losing their social license to operate. Improving water management through increased efficiency and recycling, particularly in regions with baseline water stress, can result in lower operating costs, reduced risks and higher intangible asset value.
    • 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.
      • Responsible Drinking & Marketing The irresponsible consumption of alcoholic beverages can lead to negative social externalities such as drunk driving, addiction, underage drinking, death and many other public health issues. Every year, alcohol consumption contributes to millions of deaths worldwide, including a sizeable proportion of underage youth and young adults. The harmful use of alcohol presents an acute concern in countries that lack strong laws to protect against alcohol’s detrimental effects. Entities may be required to internalise the costs of these social externalities through taxes, lawsuits, or reputational harm, which can have substantial financial consequences. Failing to effectively manage social externalities may result in unfavourable regulation and impair the entity’s social licence to operate. Through education, engagement, community partnerships and responsible marketing, particularly to underage individuals, entities can address and mitigate many of the social externalities associated with alcohol misuse. Entities that effectively manage this issue can reduce the likelihood of extraordinary expenses, improve market share and decrease liabilities.
    • 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.
      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.
      • Packaging Lifecycle Management Packaging materials represent a significant cost to entities in the Alcoholic Beverages industry. Although many alcoholic beverage entities do not manufacture their own bottles and packaging, they face reputational risks associated with the negative externalities that their products’ containers are associated with over their lifecycle. Entities are also directly affected by legislation regarding end-of-life management of beverage containers. Alcoholic beverage entities can work with packaging manufacturers on packaging design to generate cost savings, improve brand reputation and reduce the environmental impact of packaging. Efforts to reduce the amount of material used in packaging can reduce transportation costs, exposure to supply and price volatility and the amount of virgin material extracted for manufacturing. In the end-of-life phase, take-back and recycling programmes and partnerships can meet regulations, help achieve cost savings and reduce environmental impacts. Entities that effectively manage this issue can improve profitability and reduce the cost of capital.
    • 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 Alcoholic Beverages 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 entities’ ability to secure supply and manage price fluctuations. Supply chain interruption can cause loss of revenue and negatively impact market share if entities are unable to find alternatives for key suppliers or must source ingredients at a higher cost. Supply chain management issues related to labour practices, environmental responsibility, ethics or corruption may also result in regulatory fines or increased long-term operational costs. The consumer-facing nature of the industry increases the reputational risks associated with supplier actions. Managing an entity’s exposure to environmental and social risks may improve supply chain resiliency and enhance an entity’s reputation. Entities can engage with key suppliers to manage environmental and social risks to improve supply chain resiliency, mitigate reputational risks and 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 Alcoholic Beverages industry source a wide range of ingredients, largely agricultural inputs, from suppliers worldwide. The industry’s ability to source ingredients fluctuates with supply availability, which may be affected by climate change, water scarcity, land management and other resource scarcity considerations. This exposure can result in price volatility and can affect entity profitability. Ultimately, climate change, water scarcity and land-use restriction present risks to an entity’s long-term ability to source key materials and ingredients. Entities that source ingredients that are more productive, effectively cultivated and less resource-intensive, or those that work closely with suppliers to increase their adaptability to climate change and manage exposure to other resource scarcity risks may reduce price volatility or supply disruptions.
    • Business Ethics The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.
      None

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