Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Real Estate Real Estate industry entities own, develop and operate income-producing real estate assets. Entities in this industry commonly are structured as real estate investment trusts (REITs) and operate in a wide range of real estate industry segments, including residential, retail, office, health care, industrial and hotel properties. REITs typically participate in direct real estate asset ownership, thereby providing investors with the opportunity to obtain real estate exposure without direct asset ownership and management. Although REITs often concentrate on individual Real Estate industry segments, many REITs diversify investments across multiple property types.
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  • Auto Parts Entities in the Auto Parts industry supply motor vehicle parts and accessories to original equipment manufacturers (OEM). Auto parts entities typically specialise in manufacturing and assembling parts or accessories, such as engine exhaust systems, alternative drivetrains, hybrid systems, catalytic converters, aluminium wheels (rims), tyres, rear-view mirrors, and onboard electrical and electronic equipment. Although the larger automotive industry includes several tiers of suppliers that provide parts and raw materials used to assemble motor vehicles, the scope of these Auto Parts industry disclosures includes only Tier 1 suppliers that supply parts directly to OEMs. The scope of the industry excludes captive suppliers, such as engine and stamping facilities, owned and operated by OEMs. It also excludes Tier 2 suppliers, which provide inputs for the Auto Parts industry.
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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.
  • Real Estate 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 Real estate assets consume significant amounts of energy for space heating, ventilating, air conditioning, water heating, lighting and using equipment and appliances. The type and magnitude of energy used and strategies for energy management are dependent upon the real estate asset class, among other factors. Generally, grid electricity is the predominant form of consumed energy, though on-site fuel combustion and renewable energy production also serve important roles. Energy costs may be borne by entities or property occupants; either way, energy management is a significant industry issue. To the extent that the real estate owner assumes direct responsibility for energy costs, such costs often represent significant operating costs, indicating the importance of energy management. Energy pricing volatility and a general trend of electricity price increases, energy-related regulations, potentially wide variations in energy performance in existing building stock, and opportunities for efficiency improvements through economically attractive capital investments all show the importance of energy management. Energy costs assumed by occupants, either in whole or in part, are nonetheless likely to affect entities through various channels. Building energy performance is a notable driver of tenant demand, because it allows them to control operating costs, mitigate potential environmental impacts, and, often just as importantly, maintain a reputation for resource conservation. Additionally, real estate owners may be exposed to energy-related regulations even if energy costs are the occupants’ responsibility. Overall, entities that effectively manage asset energy performance may realise reduced operating costs and regulatory risks, as well as increased tenant demand, rental rates and occupancy rates—all of which drive revenue and asset value appreciation. Improving energy performance is dependent upon property type and location, target tenant market, local building codes, physical and legal opportunities to deploy distributed renewable energy, the ability to measure consumption, and existing building stock, among other factors.
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
      • Water Management Buildings consume significant amounts of water in their operations, through water fixtures, building equipment, appliances and irrigation. Water consumption operating costs may be significant depending on property type, tenant operations, geographical locations and other factors. Entities can be responsible for a building’s water costs, or common area water costs, though entities commonly allocate all, or a portion, of these costs to occupants. In these arrangements, water management through tenant demand and regulatory exposure continues to be important. Tenants may assess real estate asset water efficiency to control operating costs, mitigate environmental impacts of operations, and, often just as importantly, develop a reputation for resource conservation. Additionally, real estate owners may comply with water-related regulations even if water costs are the occupants’ responsibility. Overall, entities that effectively manage asset water efficiency, even if they bear no direct water costs, may realise reduced operating costs and regulatory exposure, as well as increased tenant demand, rental rates and occupancy rates—all of which drive revenue and asset value appreciation. Long-term historic water expense increases and expectations of continued increases because of overconsumption and constrained supplies resulting from population growth and shifts, pollution and climate change show the importance of water management. Improving asset water efficiency is dependent upon the property type, water availability, target tenant market, local building codes, the ability to measure consumption and the existing building stock, among other factors.
    • 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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    • 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
    • Product Design & Lifecycle Management The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.
      • Management of Tenant Sustainability Impacts Real estate assets generate significant sustainability impacts, including resource consumption (energy and water), waste generation and impacts on occupant health through indoor environmental quality. While entities own real estate assets, the tenant operations of such assets dominate the sustainability impacts produced by the built environment. Tenants may design and construct leased spaces according to their operating needs. In turn, their operations consume significant amounts of energy and water, generate waste, and impact the health of those living, working, shopping, or visiting the properties. While these sustainability impacts often are often generated by tenant operations and activities, real estate owners play an important role in influencing tenant sustainability impacts. The way entities in the industry structure their agreements, contracts and relationships with tenants may be instrumental in managing the sustainability impacts of their tenants effectively, and ultimately, the impacts of their assets. Managing tenant sustainability impacts may include mitigating the problem of split incentives by aligning both parties’ financial interests with sustainability outcomes, establishing systematic measurement and communication of resource consumption data, creating shared performance goals, and mandating minimum sustainability performance or design requirements, among other strategies. Effective management of tenant sustainability impacts, particularly related to energy, water and indoor environmental quality, may drive asset value appreciation, increase tenant demand and satisfaction, decrease direct operating costs, or decrease risks related to building codes and regulations.
    • 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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    • Physical Impacts of Climate Change The category addresses the company’s ability to manage risks and opportunities associated with direct exposure of its owned or controlled assets and operations to actual or potential physical impacts of climate change. It captures environmental and social issues that may arise from operational disruptions due to physical impacts of climate change. It further captures socio-economic issues resulting from companies failing to incorporate climate change consideration in products and services sold, such as insurance policies and mortgages. The category relates to the company’s ability to adapt to increased frequency and severity of extreme weather, shifting climate, sea level risk, and other expected physical impacts of climate change. Management may involve enhancing resiliency of physical assets and/or surrounding infrastructure as well as incorporation of climate change-related considerations into key business activities (e.g., mortgage and insurance underwriting, planning and development of real estate projects).
      • Climate Change Adaptation Climate change affects entities in the industry via frequent or high-impact extreme weather events and changing climate patterns. How an entity structures its business model to incorporate assessments of climate change risks, and the adaptation to such risks, may increasingly be relevant to entity value over the long-term. More specifically, investment strategies with assets located on floodplains and in coastal regions exposed to inclement weather may require increased risk mitigation and business model adaptation to long-term climate change. These strategies are especially important considering the long-term challenges associated with flood insurance rates, the financial stability of government-subsidised flood insurance programs, and financing stipulations or other creditor concerns. Besides insurance, other risk mitigation measures include improvements to physical asset resiliency and lease terms that transfer risk to tenants, although these measures can create their own costs and risks for real estate entities. To ensure long-term growth, entities must implement comprehensive climate change adaptation strategies, account for trade-offs between various risk mitigation strategies, and integrate all projected cost and benefit considerations over the long-term.
    • Competitive Behaviour The category covers social issues associated with existence of monopolies, which may include, but are not limited to, excessive prices, poor quality of service, and inefficiencies. It addresses a company’s management of legal and social expectation around monopolistic and anti-competitive practices, including issues related to bargaining power, collusion, price fixing or manipulation, and protection of patents and intellectual property (IP).
      None
  • Auto Parts 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 Most energy consumed in the automobile manufacturing process occurs in the supply chain. Auto parts manufacturers use electricity and fossil fuels in their production processes, resulting in direct and indirect emissions of greenhouse gases (GHGs). Purchased electricity is a majority of the energy used in the Auto Parts industry. Sustainability initiatives such as incentives for energy efficiency and renewable energy are making alternative sources of energy more cost competitive. Regulators and consumers also are encouraging the industry to reduce GHG emissions. While managing the cost and risks associated with overall energy efficiency, reliance on various types of energy and access to alternative energy sources may become increasingly important.
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
      None
    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
      • Waste Management Manufacturing auto parts involves using significant amounts of materials (including steel, iron, aluminium and plastics, among others). Waste generated by the industry includes machine lubricants and coolants, aqueous and solvent cleaning systems, paint, and scrap metals and plastics. Auto parts manufacturers spend a significant proportion of revenue on the cost of materials. Therefore, entities that manage manufacturing inputs properly by reducing and recycling waste may mitigate price volatility and supply disruption risks. Moreover, auto parts manufacturers may achieve cost savings and improve operational efficiency by increasing the proportion of waste recycled. Equally, auto parts manufacturers whose waste management practices create negative environmental impacts may face increased regulatory oversight. Violating environmental regulations may increase legal expenses as well as capital expenditures for pollution-control facilities and occupational health and safety projects.
    • 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 Driving is a risky activity, since distracted driving, speeding, drunk driving, dangerous weather conditions and other factors may result in accidents that expose drivers, passengers and bystanders to injuries and deaths. Accidents can also be caused by defective vehicle parts, and an entity’s failure to detect defects before vehicles are sold may have significant financial repercussions for both automobile and auto parts manufacturers. Entities improving vehicle safety and responding quickly when defects are identified may mitigate potentially costly regulatory action or customer lawsuits. These efforts may preserve relationships with original equipment manufacturers (OEMs), who often select Tier 1 suppliers based on their safety performance and reliability. As cars integrate more sophisticated electronics and technologies, risks related to recalls may increase. Through effective management of product safety, entities may enhance their brand value and improve sales over the long term.
    • 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.
      • Design for Fuel Efficiency Automobile manufacturers increasingly are demanding motor parts and components that reduce vehicle fuel consumption. Fuel-efficient components and parts are critical in reducing automobile tailpipe emissions through energy efficiency gains and weight reductions, among other factors. Auto parts entities that design and manufacture such parts may increase sales to auto manufacturers that increasingly are facing stricter environmental regulations and customer preferences for more environmentally friendly cars.
    • 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 Entities in the Auto Parts industry commonly rely on rare earth metals and other critical materials as important inputs for finished products. Many of these inputs have few substitutes and often are sourced from a few countries, many of which may be subject to geopolitical uncertainty. Other sustainability-related impacts such as climate change, land use, resource scarcity and conflict in regions where the industry’s supply chain operates are also increasingly shaping the industry’s ability to source materials. Additionally, increased competition for these materials because of growing global demand from other sectors may result in price increases and supply risks. These materials play a crucial role in clean energy technologies, such as electric and hybrid vehicles. As regulators strive to reduce greenhouse gas emissions and consumers demand more fuel-efficient vehicles, the share of hybrids and zero-emission vehicles (ZEVs) produced by the Automobiles industry may continue to increase in the future. Entities that limit the use of critical materials, secure sourcing and develop alternatives may mitigate supply disruptions and volatile input prices, which could adversely affect their margins, risk profile and cost of capital.
      • Materials Efficiency Millions of vehicles worldwide reach the end of their useful lives every year. At the same time, the rate of vehicle ownership is expanding globally, resulting in more end-of-life vehicles. To reduce vehicle lifecycle impact, auto parts manufacturers may design parts to be more easily recyclable and reusable, and apply modularity principles to product design. They also may sponsor take-back programmes to ensure safe product disposal and reuse. Given input price volatility and resource constraints, entities that manage materials efficiency may improve their long-term operational efficiency and risk profile. In addition, entities may reduce manufacturing costs by using fewer materials or by recycling materials, which may improve their margins.
    • 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
    • Competitive Behaviour The category covers social issues associated with existence of monopolies, which may include, but are not limited to, excessive prices, poor quality of service, and inefficiencies. It addresses a company’s management of legal and social expectation around monopolistic and anti-competitive practices, including issues related to bargaining power, collusion, price fixing or manipulation, and protection of patents and intellectual property (IP).
      • Competitive Behaviour Competitive business practices are an important governance issue for entities in the Auto Parts industry. Although industry concentration is low, a wide range of auto parts are available, and competition for business within each category of parts may be limited. Therefore, leading producers of any specific auto part may wield substantial market power in specific market segments, creating antitrust concerns. Collusion and price fixing by auto parts manufacturers may ultimately affect consumers through higher vehicle prices. If such activities are discovered, jurisdictions may impose legal or regulatory penalties, and the resulting reputational damage may adversely affect an entity’s valuation.

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