Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Health Care Delivery The Health Care Delivery industry owns and manages hospitals, clinics and other health care related facilities. Entities provide a range of services, including inpatient and outpatient care, surgery, mental health, rehabilitation and clinical laboratory services. Demand for health care delivery services is driven largely by insurance coverage rates, demographics, illness and injury rates. The industry is characterised by high fixed labour and facilities costs, and an increased regulatory focus on reduced costs of care and improved outcomes. Health care delivery entities also face significant competition for patients and resources from private, non-profit and religious health care systems.
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  • Electric Utilities & Power Generators Electric Utilities & Power Generators industry entities generate electricity; build, own and operate transmission and distribution (T&D) lines; and sell electricity. Utilities generate electricity from many different sources, commonly including coal, natural gas, nuclear energy, hydropower, solar, wind and other renewable and fossil fuel energy sources. The industry comprises entities operating in both regulated and unregulated business structures. Regulated utilities face comprehensive regulatory oversight of their pricing mechanisms and their allowed return on equity, among other types of regulation, to maintain their licence to operate as a monopoly. Unregulated entities or merchant power entities are often independent power producers (IPPs) that generate electricity to sell to the wholesale market, which includes regulated utility buyers and other end users. Furthermore, entities in the industry may operate across both regulated and deregulated power markets depending on their operational span. Regulated markets typically contain vertically integrated utilities that own and operate everything from the generation of power to its retail distribution. Deregulated markets commonly split generation from distribution to encourage wholesale power generation competition. Overall, the complex task of providing reliable, accessible, low-cost power while balancing the protection of human life and the environment remains a challenge.
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Relevant Issues for both Industries (17 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.
  • Health Care Delivery 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).
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    • Air Quality The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category.
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management Health Care Delivery entities operate energy-intensive facilities and rely on both purchased electricity and fuel. The consumption of both can contribute to environmental impacts, including climate change and pollution. Legislative attempts to limit these impacts and to incentivise energy efficiency and renewable energy may result in price volatility associated with fossil fuels and conventional electricity. Entities that improve energy efficiency may decrease costs and limit exposure to energy price fluctuations.
    • 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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    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
      • Waste Management Health Care Delivery entities generate a significant amount of regulated medical and pharmaceutical waste. Disposal fees for these types of waste are typically higher than that of conventional waste and may present a significant cost for the industry. Entities that reduce the amount of waste generated by enhanced waste segregation strategies, recycling and reuse may limit their exposure to these costs.
    • 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.
      • Patient Privacy & Electronic Health Records Many jurisdictions require health care providers to establish administrative, physical and technical safeguards to protect the integrity, confidentiality, interoperability and availability of patient health information. Failure to comply with such regulations may result in civil and criminal penalties.
    • 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 for Low-Income Patients Some care delivery entities will continue to face challenges associated with serving uninsured and low-income patients. Health care delivery entities that develop innovative pricing structures that allow them to profit from increased private insurance enrolment and to expand their patient base may create a positive effect on revenue. Disclosure on how entities manage the provision of care to uninsured populations may allow users to understand the associated risks and opportunities.
    • 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.
      • Quality of Care & Patient Satisfaction Quality care delivery and patient satisfaction are essential value drivers for health care delivery entities. The link between quality of care performance and value creation may be strengthened by effective management focus on improving health care quality measures. In addition, entities may improve health care outcomes and preserve brand value by developing programmes to reduce excessive patient readmission rates and hospital-acquired conditions.
    • 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.
      • Management of Controlled Substances The Health Care Delivery industry is in a unique position with respect to the evolving use of controlled substances and managing the risk of addiction. As the provider of care, the industry also treats individuals suffering from addiction and related health concerns. Health Care Delivery entities face significant costs in addressing the health care needs of those suffering from addiction and related illnesses. Industry-wide efforts to re-evaluate controlled substance management strategies through the development of new policies, training and oversight may have positive financial effects.
    • 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.
      • Pricing & Billing Transparency Concern regarding pricing and billing transparency in the Health Care Delivery industry has resulted in increased legal and regulatory scrutiny in some jurisdictions. Coupled with increased attention to health care cost containment, this scrutiny may increase regulatory oversight of pricing and billing practices in this industry. Entities that achieve compliance and institute transparent pricing structures may better protect shareholder value.
    • 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 The Health Care Delivery industry is heavily dependent on a skilled workforce, and employees routinely are exposed to injury, illness and infection during regular duties. Relative to other industries, Health Care Delivery has one of the highest rates of injury and illness. Entities that manage this issue more effectively may reduce costs associated with workers’ compensation, productivity, morale and employee retention. Entities often mitigate risks by implementing proactive health and safety management protocols, developing employee training requirements, and conducting regular audits of their own safety practices.
    • 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 Health care delivery entities will continue to face increased competition for physicians because of increased demand, which is intensified by current and future shortages. The ability to recruit, develop and retain health care practitioners is critical to success in this industry, and disclosure on related performance indicators allows users to understand how entities are managing this important human capital issue.
    • Business Model Resilience The category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
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    • 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 Impacts on Human Health & Infrastructure An increase in extreme weather events associated with climate change may present physical threats to health care delivery facilities and create challenges in serving affected populations. Coupled with the potential spread of infectious diseases and food and water scarcity, these events may present material implications for the Health Care Delivery industry.
    • 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.
      • Fraud & Unnecessary Procedures Health care delivery entities may be subject to significant fines and penalties if their staff are found to be engaged in medical fraud. Many entities must have written policies for all employees and contractors regarding false claims, false statements and whistle-blower protections. The ability to ensure compliance in this area may have implications for health care delivery entities, including one-time charges and reputational damage.
    • 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.
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    • Systemic Risk Management The category addresses the company’s contributions to or management of systemic risks resulting from large-scale weakening or collapse of systems upon which the economy and society depend. This includes financial systems, natural resource systems, and technological systems. It addresses the mechanisms a company has in place to reduce its contributions to systemic risks and to improve safeguards that may mitigate the impacts of systemic failure. For financial institutions, the category also captures the company’s ability to absorb shocks arising from financial and economic stress and meet stricter regulatory requirements related to the complexity and interconnectedness of companies in the industry.
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  • Electric Utilities & Power Generators 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).
      • Greenhouse Gas Emissions & Energy Resource Planning Electricity generation represents the largest source of greenhouse gas (GHG) emissions in the world. Mainly carbon dioxide, methane and nitrous oxide, these emissions are mostly by-products of fossil fuel combustion. The transmission or distribution (T&D) segments of the industry produce negligible emissions. Electric utility entities could face significant operating costs and capital expenditures for mitigating GHG emissions as environmental regulations become increasingly stringent. Although many of these costs may be passed to a utility’s customers, some power generators, especially in deregulated markets, may be unable to recoup these costs. Entities may reduce GHG emissions from electricity generation through careful infrastructure investment planning by ensuring the delivery of an energy mix capable of meeting the emissions requirements set forth by regulations, and by implementing industry-leading technologies and processes. Being proactive in cost-effectively reducing GHG emissions may create a competitive advantage for entities and mitigate unanticipated regulatory compliance costs. Failure to properly estimate capital-expenditure needs and permitting costs, or other difficulties in reducing GHG emissions, may result in significant negative effects on returns in the form of asset write-downs, the costs to obtain carbon credits, or unexpected increases in operating and capital expenditures. Regulatory emphasis on this issue may increase in the coming decades, as exemplified by the international emissions-reduction agreement made at the 21st session of the United Nations Conference of the Parties in 2015.
    • Air Quality The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category.
      • Air Quality Fuel combustion in electricity-generation operations generates hazardous air pollutants. These air pollutants can create significant and localised environmental and health risks. The most common and impactful are nitrogen oxides (excluding nitrous oxide), sulphur oxide, particulate matter (PM), lead and mercury. Emissions of these localised air pollutants often are strictly regulated, creating significant compliance risks for electricity generators. Regulatory and legal risks are higher for entities operating near large communities. Harmful operational air emissions may result in regulatory penalties, higher regulatory compliance costs and capital expenditures to install control technology. In some cases, such expenditures may be cost prohibitive to continued facility operations. Entities may manage air quality concerns by reducing emissions, as well as by working with regulators to establish priorities and manage short- and long-term capital planning risks.
    • 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.
      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.
      • Water Management Electricity generation is one of the most water-intensive industries in the world in terms of water withdrawals. Thermoelectric power plants—typically coal, nuclear and natural gas—use large quantities of water for cooling purposes. The industry is facing increasing water-related supply and regulatory risks, potentially requiring capital investment in technology or even creating stranded assets. As water supplies tighten in many regions—and electricity generation, agriculture and community use compete for water supplies—power plants increasingly may be unable to operate at full capacity, or at all, because of region-specific water constraints. The availability of water is an important factor to consider when calculating the future value of many electricity-generating assets and for evaluating proposals for new generation sources. Increased water scarcity—because of factors such as increasing consumption and reduced supplies resulting from climate change, which could result in more frequent or intense droughts—could prompt regulatory authorities to limit entities’ ability to withdraw necessary amounts of water, especially in regions with high baseline water stress. Furthermore, entities must manage the growing number of regulations related to the significant biodiversity impacts that such large withdrawals may cause. To mitigate these risks, entities can invest both in more efficient water-usage systems for plants, and place strategic priority on assessing long-term water availability, as well as water-related biodiversity risks, when siting new power plants.
    • 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.
      • Coal Ash Management Electricity generators must safely discard the hazardous by-products of their operations. Coal-fired electricity generation is a major source of hazardous waste because of coal ash. Coal ash can have a significant effect on entity value in the power-generation segment of the industry. This issue will affect entities differently, depending on the extent to which they generate electricity from coal. Coal ash is one of the largest industrial waste streams in the world. It contains heavy metal contaminants associated with cancer and other serious diseases, especially when they leach into groundwater. Coal ash can have beneficial uses when recycled or reused, such as in the creation of fly ash concrete or wallboard, creating revenue opportunities for electric utilities. Safe handling of coal ash, locating coal ash impoundments to minimise potential harm to human life or the environment, effective monitoring and containment of coal ash, and the sale of coal ash for beneficial uses are important strategies to reduce regulatory compliance costs as well as penalties for non-compliance. Coal ash leaching into the surrounding environment can result in significant litigation and remediation costs.
    • 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.
      None
    • 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.
      • Energy Affordability An objective of regulated electric utilities is to provide reliable, affordable and sustainable electricity. Entities in the industry manage these potentially competing priorities to maintain favourable relations with customers and regulators—and ultimately to earn appropriate returns for shareholders. The affordability of energy is particularly challenging for entities to balance because it often conflicts with other core objectives. Utility energy bills generally are perceived to be increasingly unaffordable for low-income customers (affordability is determined by both the net cost of energy bills and the underlying customer economics). Ensuring that utility bills are affordable is crucial for utilities working to build trust (intangible asset value) with regulators and customers. Regulatory relations are an important value driver for utilities and one of the issues analysed closely by investment analysts. The willingness of regulators to grant rate requests, rate structure modifications, cost recovery and allowed returns determines financial performance and investment risk. Effectively managing affordability may enable utilities to invest more capital, favourably revise rate structures and increase allowed returns. Furthermore, utilities that ineffectively manage affordability increasingly are exposed to customers defecting from the grid (or reducing reliance on the grid) by implementing distributed energy resources or pursuing other alternative energy sources (for example, industrial customers’ use of combined heat and power). Managing affordability involves operating an efficient business with a comprehensive, long-term strategy, as well as working closely with regulators and public policymakers on rate structures and, potentially, bill-assistance programmes. Although a utility’s business model and rate structure largely determine the precise nature of the financial effects, affordability is a critical business issue for utilities managing, maintaining and growing customer bases, building intangible asset value, creating investment and return opportunities, and ultimately delivering shareholder returns.
    • 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
    • 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 Employees of entities in the Electric Utilities & Power Generators industry face numerous hazards in the construction and maintenance of electric transmission and distribution lines, as well as with the various means of electricity generation. Many of these employees work for extended periods at great heights, operate heavy machinery and face electrocution risks. Although the industry has made significant strides in safety improvements, significant risks remain, along with opportunities for further improvements. The nature of the industry—as a necessity of modern life and economies, as well as commonly a legally granted monopoly—means that entity actions receive significant public and regulatory scrutiny. Entities must maintain a culture of safety to ensure adequate working conditions for their workers, strong operational productivity, and to uphold positive views from the perspective of regulators and manage potential risks of regulatory penalties.
    • 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
    • Business Model Resilience The category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
      • End-Use Efficiency & Demand Energy efficiency is a low-lifecycle-cost method to reduce greenhouse gas (GHG) emissions, because less electricity needs to be generated to provide the same end-use energy services. Utilities can promote energy efficiency and conservation among their customers. Such strategies may include offering rebates for energy-efficient appliances, weatherising customers’ homes, educating customers on energy-saving methods, offering incentives to customers to curb electricity use during times of peak demand (‘demand response’), or investing in technology such as smart meters, which allow customers to track their energy use. While saving consumers money, these efforts also may reduce operating costs for electric utilities by decreasing peak demand. Furthermore, depending on the utility regulatory framework, local jurisdictions may mandate that entities develop energy efficiency plans before permitting new builds. Companies with effective strategies to reduce the downside risks from demand fluctuations, may gain adequate and timely returns on needed investments. Furthermore, reducing costs through efficiency initiatives may earn higher, long-term risk-adjusted returns.
    • 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).
      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.
      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.
      • Nuclear Safety & Emergency Management Although rare, nuclear accidents can have significant human health and environmental consequences because of their severity. Owners of nuclear power plants in many regions have operated for decades without any major public safety incidents, but the occurrence of infrequent but large-magnitude incidents anywhere in the world can have major effects on the entire nuclear power industry. Entities that own and operate nuclear plants may lose their licence to operate, as well as face many other financial consequences in the event of an accident—though entities carry insurance and may have legal protections from some liabilities. Failure to comply with the safety regulations can be expensive to nuclear power operators; in extreme circumstances it may make the continued operation of the plant uneconomical. Facing potentially significant financial repercussions, both from ongoing safety compliance as well as tail risk incidents, entities that own or operate nuclear plants must be vigilant in the safety compliance, best practices and upgrades of their facilities. They also must maintain robust emergency preparedness training for their staff and a strong safety culture. These measures can reduce the probability that accidents will occur and enable an entity to effectively detect and respond to such incidents.
    • Systemic Risk Management The category addresses the company’s contributions to or management of systemic risks resulting from large-scale weakening or collapse of systems upon which the economy and society depend. This includes financial systems, natural resource systems, and technological systems. It addresses the mechanisms a company has in place to reduce its contributions to systemic risks and to improve safeguards that may mitigate the impacts of systemic failure. For financial institutions, the category also captures the company’s ability to absorb shocks arising from financial and economic stress and meet stricter regulatory requirements related to the complexity and interconnectedness of companies in the industry.
      • Grid Resiliency Electricity is critical for the continued function of most elements of modern life, from medicine to finance, creating a societal reliance on continuous service. Major disruptions to electricity infrastructure may result in potentially high societal costs. Disruptions can be caused by extreme weather events, natural disasters and cyberattacks. As the frequency and severity of extreme weather events associated with climate change continues to increase, all segments of electric utilities entities—and especially major transmission and distribution (T&D) operations—will face increasing physical threats to their infrastructure. Extreme weather events could result in frequent or significant service disruptions, outages and require upgrade or repair of damaged or compromised equipment, all of which may add substantial costs and damage brand reputation among regulators and customers. The increased use of smart grid technology has several benefits, including strengthening the resiliency of the grid to extreme weather events. However, this technology may make the grid more vulnerable to cyberattacks, because it provides hackers more entryways into infrastructure systems. Entities must implement strategies that minimise the probability and magnitude of impacts from extreme weather events and cyberattacks. To remain competitive in the face of increasing external competition, entities must improve the reliability, resilience and quality of their infrastructure.

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