Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Water Utilities & Services Water Utilities & Services industry entities own and operate water supply and wastewater treatment systems (generally structured as regulated utility businesses) or provide operational and other specialised water services to system owners (usually market-based operations). Water supply systems include the sourcing, treatment and distribution of water to residences, businesses and other entities such as governments. Wastewater systems collect and treat wastewater, including sewage, greywater, industrial waste fluids and stormwater runoff, before discharging the resulting effluent back into the environment.
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  • Multiline and Specialty Retailers & Distributors The Multiline and Specialty Retailers & Distributors industry encompasses a variety of retailing categories such as department stores, mass merchants, home products stores and warehouse clubs, as well as a smaller segment of distributors like electronics wholesalers and automotive wholesalers. These entities (except for the distribution segment) commonly manage global supply chains to anticipate consumer demands, keep costs low and keep products stocked in their brick-and-mortar storefronts. This is a highly competitive industry in which each category generally has a small number of important players characterised by generally low margins. The relatively substitutable nature of retail makes entities in this industry especially susceptible to reputational risks.
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Relevant Issues for both Industries (11 of 26)

Why are some issues greyed out? The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management Entities in the Water Utilities & Services industry consume significant amounts of energy for the withdrawal, conveyance, treatment, and distribution or discharge of potable water and wastewater. Typically, an entity’s largest operating cost after purchased water, chemicals, labour and utility operating costs is energy use. Purchased grid electricity is the most common energy input. In more remote locations, entities may use on-site generation to power equipment. The inefficient use of purchased grid electricity creates environmental externalities, such as increased Scope 2 greenhouse gas emissions. Environmental regulations may affect the future grid energy mix, resulting in price increases. Additionally, climate change is expected to impact grid reliability and affect the availability of water resources. As a result, water utility energy intensity may increase in the future as water resource access becomes more difficult. Alternative water treatment, such as recycling and desalination, also can require more energy. Together with decisions about the use of alternative fuels, renewable energy and on-site electricity generation, energy efficiency can influence both the cost and the reliability of the energy supply.
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
      • Distribution Network Efficiency Water utilities develop, maintain and operate complex interconnected infrastructure networks that include extensive pipelines, canals, reservoirs and pump stations. Distribution networks may lose significant volumes of water (called ‘non-revenue water’ because it is a distributed volume of water not reflected in customer billings). This water is lost primarily because of infrastructure failures and inefficiencies, such as leaking pipes and service connections. Non-revenue real water losses may impact financial performance, raise customer rates, and squander water and other resources such as energy and treatment chemicals. Conversely, improvements to infrastructure and operating processes may limit non-revenue losses, increase revenue and reduce costs. Efficiently directing operational and maintenance expenses or capital expenditures to distribution systems including primarily pipeline and service connection repair, refurbishment, or replacement may improve entity value and provide strong investment returns.
      • Effluent Quality Management Water and wastewater treatment facilities produce effluent that may pose risks to the environment and human health. Effluent includes residuals and solids that consist of chemicals used in the treatment process and contaminants removed from raw water or wastewater inputs. Facilities discharge treated effluent into surface water or pump it into groundwater. Potential environmental impacts vary depending on the treatment and disposal process. Additionally, consumers and regulators are becoming increasingly concerned by substances that may not be treated by wastewater facilities, such as endocrine disrupting chemicals (EDCs). Because of the environmental risks associated with effluent, treatment facilities are subject to extensive environmental regulations to control and monitor their impact. As public and regulatory scrutiny of effluent quality increases with emerging concerns about some potentially harmful substances, entities may need to innovate to ensure effluent is not harmful to the environment or human health. Effluent discharges exceeding jurisdictional limits may result in significant regulatory penalties, and frequent or severe episodes may jeopardise a utility’s social licence to operate. Entities can avoid the financial consequences of poor effluent quality management through infrastructure and equipment planning, maintenance and operations, as well as the deployment of appropriately trained and experienced labour.
    • 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.
      • Water Affordability & Access Reliable clean water access is considered a basic human right in most jurisdictions. Affordable pricing and sufficient access are essential components of this right. Thus, structuring water rates in a way that the community perceives to be fair is an important part of the operations and functions of entities in the Water Utilities & Services industry. Entities that collabourate with regulators to implement rate structures that are well-received by the communities they service may be better able to maintain financial stability and take advantage of opportunities for growth—especially because of the widespread underfunding of water infrastructure in many regions. Entities that use rate mechanisms that inhibit access to water through prohibitive costs or otherwise, may face community opposition. Entities should ensure fair pricing and access, as well as rates that can adequately fund infrastructure over the long term, provide safe drinking water and wastewater treatment, and receive appropriate returns on capital.
    • 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.
      • Drinking Water Quality Entities in the industry must ensure that drinking water conforms to health regulations, satisfies customer expectations and is supplied reliably. To protect human health, entities must protect water sources from contamination, which also may reduce treatment processes and costs for entities. Comprehensive treatment processes are designed, developed and maintained to meet water quality standards, and the finished water output is monitored routinely for compliance and safety. Natural disasters, such as forest fires and flooding, may also affect water quality. Overall, entities invest significant resources to deliver safe drinking water consistently to customers. Failure to ensure adequate water quality may result in regulatory fines, litigation, increased operating costs or capital expenditures, reputational risk, and asset or business seizure.
    • Labour Practices The category addresses the company’s ability to uphold commonly accepted labour standards in the workplace, including compliance with labour laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labour, forced or bonded labour, exploitative labour, fair wages and overtime pay, and other basic workers’ rights. It also includes minimum wage policies and provision of benefits, which may influence how a workforce is attracted, retained, and motivated. The category further addresses a company’s relationship with organized labour and freedom of association.
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    • 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.
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    • 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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    • 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 Consumer level water efficiency and conservation—whether a product of government mandates, environmental consciousness or demographic trends—is increasingly important for long-term resource availability and the financial performance of the water supply segment of the industry. How utilities work with regulators to mitigate revenue declines while increasing end-use resource efficiency may be financially material. Water efficiency mechanisms, including rate decoupling, may ensure that a utility’s revenue can adequately cover its fixed costs and provide the desired level of returns regardless of sales volume, while incentivising customers to conserve water. Efficiency mechanisms can align utilities’ economic incentives with environmental and social interests, including improved resource efficiency, lower rates and increased capital investments in infrastructure. Water utilities may manage rate mechanism impacts through positive regulatory relations, forward-looking rate cases that incorporate efficiency and a strong execution of efficiency strategy.
    • 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.
      • Water Supply Resilience Water supply systems obtain water from groundwater and surface water sources. Water supplies either may be accessed directly or purchased from a third party, often a government entity. Water scarcity, water source contamination, infrastructure failures, regulatory restrictions, competing users and overconsumption by customers are all factors that may jeopardise sufficient water supply access. These issues, combined with an increasing risk of extreme and frequent drought conditions because of climate change, may result in inadequate supplies or mandated water restrictions. The related financial impacts may manifest in diverse ways, depending on rate structure, but are most likely to impact entity value through decreased revenue. Water supply challenges also may increase the price of purchased water, which could result in higher operating costs. Failures of critical infrastructure such as aqueducts and canals, which could result from events such as earthquakes, can present catastrophic risks to customers of the water supply system and could inflict untold financial consequences. Entities may mitigate water supply risks (and the resulting financial risks) through diversification of water supplies, sustainable withdrawal levels, technological and infrastructure improvements, contingency planning, positive relations with regulators and other major users, as well as rate structures.
    • 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).
      • Network Resiliency & Impacts of Climate Change Climate change may create uncertainty for water supply systems and wastewater systems because of potential impacts on infrastructure and operations. Climate change may result in increased water stress, more frequent severe weather events, reduced water quality and rising sea levels that could impair utility assets and operations. Water supply and wastewater disposal are basic services for which maintaining operational continuity is of utmost importance. The increasing frequency and severity of storms challenge water and wastewater treatment facilities, and these factors can affect service continuity. Intense precipitation may result in sewage volumes that exceed treatment facility capacity resulting in the release of untreated effluent. Minimising current and future risks of service disruptions and improving service quality may require additional capital expenditures and operational expenses. As the likelihood of extreme weather events increases, entities that address these risks through redundancies and strategic planning may better serve customers and improve performance.
  • Multiline and Specialty Retailers & Distributors 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 in Retail & Distribution Entities in this industry require significant amounts of energy for retail facilities and warehouses. An increasing number of greenhouse gas (GHG) emissions regulations and incentives for energy efficiency and renewable energy may result in price increases for conventional electricity sources while making alternative sources more cost-competitive. Fossil fuel-based energy production and consumption contribute to significant environmental impacts, including climate change and pollution. Energy sourcing decisions can create trade-offs related to energy supply costs and operational reliability. Overall energy efficiency and access to alternative energy sources are becoming increasingly important for entities to manage. Efficiency in this area can have financial implications through direct cost savings, which are particularly beneficial in this low-margin industry.
    • 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
    • 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 Consumers trust retail entities with their financial and personal data every time they make a noncash transaction with a credit or debit card or other method. Credit cards and debit cards have eclipsed cash and cheques as consumers’ preferred payment methods in many jurisdictions around the world. In these noncash transactions, retailers build up a relationship of trust with consumers, assuring them of the safety of their personal information. Data breaches can occur both through breaches of the physical payment technology, called point-of-sales breaches, as well as through cyber-attacks. As consumers become more educated about the threats of cybercrime, their perceptions of an entity’s cybersecurity will become increasingly important to maintain or gain market share. Retailers that prevent major data breaches also can avoid harming brand value and reduce liabilities.
    • 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.
      None
    • Labour Practices The category addresses the company’s ability to uphold commonly accepted labour standards in the workplace, including compliance with labour laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labour, forced or bonded labour, exploitative labour, fair wages and overtime pay, and other basic workers’ rights. It also includes minimum wage policies and provision of benefits, which may influence how a workforce is attracted, retained, and motivated. The category further addresses a company’s relationship with organized labour and freedom of association.
      • Labour Practices The retail industry’s significance to the global economy as a major employer often puts it at the centre of public labour-practice discussions. These discussions can have serious reputational implications for entities in the industry if their labour practices are poor. The low average wages typical of the industry, which help entities maintain low prices on products, may increase these labour-related risks. Since customers regularly interact directly with retail employees, entities may experience decreased market share and revenue from negative consumer sentiment because of poor labour relations. Entities can enhance labour productivity and employee engagement by taking a long-term approach to managing workers in areas such as compensation and workers’ rights. In addition to mitigating risks, improvements in labour productivity may strengthen an entity’s reputation and reduce its cost of capital.
    • 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.
      • Workforce Diversity & Inclusion The Multiline and Specialty Retailers & Distributors industry is consumer-facing and relies on communicating effectively with customers during the sales process and adapting to changing consumer demands for products. As many developed markets undergo massive demographic shifts, including increases in minority populations, entities in this industry can benefit from ensuring that their culture and hiring and promotion practices embrace building a diverse workforce for management and junior staff. Retailers that respond to this demographic shift and employ staff who can recognise the needs of diverse populations may be better positioned to capture demand from consumer markets whose members have traditionally been overlooked, providing entities a competitive advantage. Furthermore, such entities may benefit from improved reputations among consumers, as well as decreased legal and regulatory risks.
    • 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.
      • Product Sourcing, Packaging & Marketing Entities in the Multiline and Specialty Retailers & Distributors industry sell a wide array of products including electronics, clothing, furnishings and cosmetics, all of which have environmental and social impacts throughout their lifecycles. The size and buying power of many entities in this industry allow them to work with their suppliers to source products and packaging with lower lifecycle environmental and social impacts. Entities that perform well in this regard may benefit from increased customer demand and improved margins. To take a proactive approach to engaging suppliers, entities in the industry may employ strategies such as using certification standards and reducing the environmental impacts of packaging.
    • 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.
      None
    • Materials Sourcing & Efficiency The category addresses issues related to the resilience of materials supply chains to impacts of climate change and other external environmental and social factors. It captures the impacts of such external factors on operational activity of suppliers, which can further affect availability and pricing of key resources. It addresses a company’s ability to manage these risks through product design, manufacturing, and end-of-life management, such as by using of recycled and renewable materials, reducing the use of key materials (dematerialization), maximizing resource efficiency in manufacturing, and making R&D investments in substitute materials. Additionally, companies can manage these issues by screening, selection, monitoring, and engagement with suppliers to ensure their resilience to external risks. It does not address issues associated with environmental and social externalities created by operational activity of individual suppliers, which is covered in a separate category.
      None
    • Physical Impacts of Climate Change The category addresses the company’s ability to manage risks and opportunities associated with direct exposure of its owned or controlled assets and operations to actual or potential physical impacts of climate change. It captures environmental and social issues that may arise from operational disruptions due to physical impacts of climate change. It further captures socio-economic issues resulting from companies failing to incorporate climate change consideration in products and services sold, such as insurance policies and mortgages. The category relates to the company’s ability to adapt to increased frequency and severity of extreme weather, shifting climate, sea level risk, and other expected physical impacts of climate change. Management may involve enhancing resiliency of physical assets and/or surrounding infrastructure as well as incorporation of climate change-related considerations into key business activities (e.g., mortgage and insurance underwriting, planning and development of real estate projects).
      None

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