Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Biotechnology & Pharmaceuticals The Biotechnology & Pharmaceuticals industry develops, manufactures, and markets a range of brand-name and generic medications. A significant portion of the industry is driven by research and development, a high risk of product failure during clinical trials, and the need to obtain regulatory approval. Concerns over pricing practices and consolidation within the sector have created downward pricing pressures. Demand for the industry’s products is largely driving by population demographics, rates of insurance coverage, disease profiles, and economic conditions.
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  • Aerospace & Defence Entities in the Aerospace & Defence industry include manufacturers of commercial aircraft, aircraft parts, aerospace and defence products, as well as defence prime contractors. Commercial aircraft manufacturers represent approximately one quarter of industry revenue and sell mainly to commercial airlines and governments. Aerospace and defence parts manufacturers represent the largest segment of the industry by total revenue, selling primarily to governments. Both aerospace and defence manufacturers operate globally and serve a global customer base. Defence primes represent approximately one quarter of total industry revenue and manufacture products including military aircraft, space vehicles, missile systems, ammunition, small arms, naval ships, and other commercial and military vehicles. Their customers consist of various government agencies and related businesses with global operations. The defence prime category also includes firearms manufacturers that sell to law enforcement agencies, businesses, distributors, retailers and consumers. Important sustainability topics within the industry include the energy efficiency and emissions profile of products and management of manufacturing energy and waste.
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Relevant Issues for both Industries (13 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.
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    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
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    • Human Rights & Community Relations The category addresses management of the relationship between businesses and the communities in which they operate, including, but not limited to, management of direct and indirect impacts on core human rights and the treatment of indigenous peoples. More specifically, such management may cover socio-economic community impacts, community engagement, environmental justice, cultivation of local workforces, impact on local businesses, license to operate, and environmental/social impact assessments. The category does not include environmental impacts such as air pollution or waste which, although they may impact the health and safety of members of local communities, are addressed in separate categories.
      • Safety of Clinical Trial Participants Clinical trials are an essential part of the biotechnology and pharmaceutical products approval process. Clinical trial participant safety is a critical component of an entity’s ability to bring a product to market successfully. Oversight of these trials is an important factor in the industry because of the numerous clinical trials conducted by third-party contract research organisations. Biotechnology & Pharmaceuticals entities that manage clinical trials effectively may enhance shareholder value through the incremental revenue associated with new products.
    • Data Security The category addresses management of risks related to collection, retention, and use of sensitive, confidential, and/or proprietary customer or user data. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed. It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data.
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    • Access & Affordability The category addresses a company’s ability to ensure broad access to its products and services, specifically in the context of underserved markets and/or population groups. It includes the management of issues related to universal needs, such as the accessibility and affordability of health care, financial services, utilities, education, and telecommunications.
      • Access to Medicines Biotechnology and pharmaceuticals entities play an important role in providing access to the industry’s products around the world. Entities may develop product pricing frameworks that account for varying levels of economic development and different health care needs across various countries. Strategies related to improving access to medicines may yield growth opportunities, innovation and unique partnerships, which may enhance shareholder value.
      • Affordability & Pricing Stakeholder emphasis on health care cost containment and increased access may continue to place downward pricing pressures on the Biotechnology & Pharmaceuticals industry. As a result, entities that have relied on raising drug prices, contractual advantages and reverse payments to protect profits may be challenged by efforts to reduce costs. Entities that effectively manage their global pricing practices and associated stakeholder scrutiny of pricing practices may limit their risk exposure to regulatory action or adverse reputational effects.
    • 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.
      • Drug Safety Important product safety information may be discovered after controlled clinical trials and regulatory approval. Subsequently, entities may be exposed to the financial implications of associate adverse events and product recalls. Product safety concerns, manufacturing defects or inadequate disclosure of product-related risks may result in significant product liability claims. Biotechnology & Pharmaceuticals entities that mitigate the incidence of product recalls, safety concerns and enforcement actions may better preserve shareholder value. In addition, concern over the abuse or resale of certain medications has resulted in the development of mandated take-back programmes. Entities that successfully engage in these programmes may limit future liabilities.
    • 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.
      • Counterfeit Drugs Fake or substandard medication presents a significant risk to consumers in all countries. Biotechnology & Pharmaceuticals entities may face added costs as jurisdictions implement drug supply chain regulations to prevent counterfeit, substandard or mislabelled drugs from entering the pharmaceutical distribution system. Entities that fail to manage this issue effectively may face material risks associated with the loss of public confidence and reduced revenue.
    • 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.
      • Ethical Marketing Biotechnology & Pharmaceuticals entities face challenges associated with the marketing of specific products. Direct-to-consumer advertisements for prescription drugs provide opportunities for increasing market share. However, marketing off-label uses may result in significant fines and settlements. Corporate disclosure of legal and regulatory fines and the codes of ethics that govern marketing activities may allow investors to better understand performance in this area.
    • 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 Recruitment, Development & Retention Biotechnology & Pharmaceuticals entities face intense competition for recruiting and retaining employees. The industry relies on highly skilled employees to develop new products, conduct clinical trials, manage government regulations and commercialise new products. Entities that attract and retain employees despite a constrained talent pool may be better positioned to protect and enhance shareholder value.
    • Product Design & Lifecycle Management The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.
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    • Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
      • Supply Chain Management For the Biotechnology & Pharmaceuticals industry, managing supply chain quality is essential for protecting consumer health and corporate value. Biotechnology and pharmaceuticals entities that fail to ensure quality throughout their supply chains may be susceptible to lost revenue, supply disruptions and reputational damage. Disclosure of supply chain audit programmes may provide investors with an understanding of how entities in this industry are protecting shareholder value.
    • 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.
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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 Biotechnology & Pharmaceuticals entities are subject to various jurisdictional laws and regulations pertaining to bribery, corruption and health care fraud and abuse. The ability of entities to ensure compliance throughout their global and domestic operational footprint may have material implications. Corporate disclosure of legal and regulatory fines and the codes of ethics that govern their interactions with health care professionals may allow investors to monitor performance in this area.
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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 Energy is a critical input to aerospace and defence manufacturing processes. Purchased electricity is the largest share of the industry’s energy expenditures, followed by purchased fuels. The type of energy used, magnitude of consumption and energy management strategies depend on the type of products manufactured. An entity’s energy mix, including electricity generated on-site, grid-sourced electricity and alternative energy, may influence the cost and reliability of energy supply and, ultimately, affect the entity’s cost structure and regulatory risk.
    • 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.
      • Hazardous Waste Management Aerospace and defence product manufacturing may generate hazardous process waste, which may include heavy metals and wastewater treatment sludge. Entities face regulatory and operational challenges in managing waste, since some wastes are subject to regulations pertaining to their transport, treatment, storage and disposal. Waste management strategies include reduced generation, effective treatment and disposal, and recycling and recovery, when possible. Such activities, although requiring initial investment or operating costs, may reduce an entity’s long-term cost structure and mitigate remediation liabilities or regulatory penalties.
    • Human Rights & Community Relations The category addresses management of the relationship between businesses and the communities in which they operate, including, but not limited to, management of direct and indirect impacts on core human rights and the treatment of indigenous peoples. More specifically, such management may cover socio-economic community impacts, community engagement, environmental justice, cultivation of local workforces, impact on local businesses, license to operate, and environmental/social impact assessments. The category does not include environmental impacts such as air pollution or waste which, although they may impact the health and safety of members of local communities, are addressed in separate categories.
      None
    • Data Security The category addresses management of risks related to collection, retention, and use of sensitive, confidential, and/or proprietary customer or user data. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed. It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data.
      • Data Security Entities in the Aerospace & Defence industry may develop sensitive military and advanced aviation products, and entities in this industry therefore may be at risk for cyber-attacks. A data security breach may be costly for an entity and its clients when information systems are compromised. Ensuring data security may require aerospace and defence entities to invest in research and development and increase capital expenditures in the short to medium term to improve the security of systems and products. Significant or frequent disruptions or security breaches may result in regulatory action, legal action, or adversely affect revenues and brand value.
    • Access & Affordability The category addresses a company’s ability to ensure broad access to its products and services, specifically in the context of underserved markets and/or population groups. It includes the management of issues related to universal needs, such as the accessibility and affordability of health care, financial services, utilities, education, and telecommunications.
      None
    • 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.
      • Product Safety Product safety is an important consideration for aerospace and defence entities given the industry’s important role in commercial aviation and military operations. Product safety incidents could result in financial impacts, including increased costs, regulatory penalties or brand-value impacts that could affect market share adversely. Additionally, counterfeit components have been found in the aerospace and defence supply chain, increasing the risk of safety incidents because of low product quality. Through product design, supplier vetting and customer engagement involving maintenance and accident investigations, entities in this industry may ensure the safety of their products over the long term, mitigating potential financial consequences such as revenue loss because of repeated safety incidents or recalls.
    • 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
    • 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.
      • Fuel Economy & Emissions in Use-phase Customer preferences and regulatory incentives are increasing the demand for energy-efficient and reduced-emissions products in the Aerospace & Defence industry. Many of the industry’s products are powered by fossil fuels and release greenhouse gases (GHGs) and other air emissions during use. As the designers and manufacturers of most of the global aerospace and defence transportation fleet, entities in this industry have a unique opportunity to support many industries and government agencies that are striving to meet GHG emissions and fuel-management goals and imperatives. Products with higher fuel economy and lower use-phase emissions may capture expanding market share and adapt to changing customer preferences and regulations around fuel economy and emissions more effectively.
    • 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.
      • Materials Sourcing Aerospace and defence entities are exposed to supply chain risks when critical materials are used in products. Entities in the industry manufacture products using critical materials with few or no available substitutes, many of which are sourced from only a few countries that may be subject to geopolitical uncertainty. Entities in this industry also face increasing global demand for these materials from other sectors, which may result in price increases and supply risks. Entities that limit the use of critical materials by using alternatives and securing their supply may mitigate the financial impacts stemming from supply disruptions and volatile input prices.
    • 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 Aerospace and defence entities based in jurisdictions with stronger business ethics laws may be vulnerable to regulatory scrutiny of their business ethics because of operations and sales in regions with weaker government enforcement of business ethics laws. Entities in this industry have been found in violation of corruption and anti-bribery laws. Unethical practices may jeopardise future revenue growth and may result in significant legal costs and higher reputational risk. As such, strong governance practices may mitigate the risk of violating business ethics laws and resulting regulatory penalties or brand-value impacts.

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