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Biofuels
Biofuels industry entities produce biofuels and process raw materials for production. Using organic feedstocks, entities manufacture biofuels that are used primarily in transportation. Entities typically source feedstocks, which include food, oil crops and animal products, from agricultural product distributors. Ethanol and biodiesel are the most widely produced biofuels, while other types include biogas, biohydrogen and synthetic biofuels, produced from a variety of organic feedstocks. Biofuels entities’ customers are chiefly fuel-blending and fuel-supply entities, including major integrated oil entities. Government regulations related to the use of renewable fuel are a significant demand driver in the industry.
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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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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.

Environment
- GHG Emissions
- 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.
- 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.
- 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.
- Waste & Hazardous Materials Management
- Ecological Impacts
Social Capital
- Human Rights & Community Relations
- Customer Privacy
- Data Security
- Access & Affordability
- Product Quality & Safety
- Customer Welfare
- Selling Practices & Product Labeling
Human Capital
- Labour Practices
- Employee Health & Safety
- Employee Engagement, Diversity & Inclusion
Business Model and Innovation
- 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.
- Business Model Resilience
- Supply Chain Management
  The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
- Materials Sourcing & Efficiency
- 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).
Leadership and Governance
- Business Ethics
- Competitive Behaviour
- Management of the Legal & Regulatory Environment
  The category addresses a company’s approach to engaging with regulators in cases where conflicting corporate and public interests may have the potential for long-term adverse direct or indirect environmental and social impacts. The category addresses a company’s level of reliance upon regulatory policy or monetary incentives (such as subsidies and taxes), actions to influence industry policy (such as through lobbying), overall reliance on a favorable regulatory environment for business competitiveness, and ability to comply with relevant regulations. It may relate to the alignment of management and investor views of regulatory engagement and compliance at large.
- 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.
- Systemic Risk Management

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.

Biofuels Remove
Access Standard
- 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
    Biofuel refineries generate air emissions that may include air pollutants and volatile organic compounds. Grain-handling equipment, boilers, wastewater treatment, and cooling, drying, distillation and fermentation units generate emissions. In most regions, such emissions typically are subject to jurisdictional regulations that limit emissions below specific thresholds. As a result, air emissions often are subject to emissions permits and abatement that may result in incremental operating and compliance costs or capital expenditures. Entities also may face regulatory penalties, as well as permit restrictions or delays from jurisdictional legal or regulatory authorities for non-compliance.
- 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 in Manufacturing
    Biofuel refining is water-intensive. Biorefineries require water for feedstock processing, fermentation, distillation and cooling. Although water use at biorefineries is modest relative to the quantities consumed during feedstock crop production, it is concentrated, and thus may affect local water resources. Facilities also may generate wastewater containing salts, organic compounds, dissolved solids, phosphorus and other substances, requiring wastewater treatment. Biofuel refineries also may face reduced water availability, related cost increases or operational disruptions. Water extraction from particular areas for refining, as well as contamination of water supplies because of refining operations, also could create regulatory risk and tensions with local communities. Water efficiency in operations and the proper treatment of effluents are therefore important for biofuels entities.
- 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.
  - Lifecycle Emissions Balance
    The rapid growth in global biofuels production has been encouraged by government energy policies that seek to reduce net GHG emissions from transportation fuels and dependence on fossil fuels. Most major renewable-fuel policies worldwide require that biofuels achieve lifecycle GHG emissions reductions relative to a fossil-fuel baseline to qualify for renewable fuel-mandate thresholds. The biofuel lifecycle emission calculation may include indirect and direct emissions from feedstock crop production and land use, fuel refining, fuel and feedstock transport, and vehicle exhaust emissions. Biofuel producers may influence net emissions directly during the refining process through energy management (fuel use), process innovations and by using feedstocks with lower emissions profiles. Fuel products that achieve a reduction in net emissions may qualify as advanced biofuels, which could increase future demand. Biofuel entities that cost-effectively reduce product net carbon emissions may gain a competitive product advantage, spur revenue growth and increase market share.
- Supply Chain Management
  The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
  - Sourcing & Environmental Impacts of Feedstock Production
    The Biofuels industry uses a variety of plant-based feedstocks for production. Most entities purchase feedstocks from agricultural producers and distributors. A growing proportion of the world’s arable land now is occupied by biofuel crops. Unsustainable cultivation practices can have negative environmental externalities, including deforestation and biodiversity loss, soil degradation, and water pollution. These factors may affect feedstock crop yields adversely over the short- and long-term. This, in turn, may influence the price and availability of feedstocks for biofuels producers. Consequently, vetting the sustainability of supply chains, such as through certifications or engagement with suppliers, is an important consideration for biofuels producers.
- 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
- Management of the Legal & Regulatory Environment
  The category addresses a company’s approach to engaging with regulators in cases where conflicting corporate and public interests may have the potential for long-term adverse direct or indirect environmental and social impacts. The category addresses a company’s level of reliance upon regulatory policy or monetary incentives (such as subsidies and taxes), actions to influence industry policy (such as through lobbying), overall reliance on a favorable regulatory environment for business competitiveness, and ability to comply with relevant regulations. It may relate to the alignment of management and investor views of regulatory engagement and compliance at large.
  - Management of the Legal & Regulatory Environment
    The Biofuels industry is dependent on government policies and regulations that create market demand and incentivise supply with tax breaks and other support for feedstock production. The Biofuels industry supports some regulations and policies related to renewable fuel policy, production tax credits and feedstock production. While regulatory support can result in positive short-term gains by supporting the biofuels market, the potential long-term adverse environmental impacts from feedstock and biofuels production may result in a reversal of beneficial policies, leading to a more uncertain regulatory environment. Consequently, biofuels entities may benefit from developing clear strategies for engaging regulators that are aligned with long-term sustainable business outcomes and that account for environmental externalities.
- 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.
  - Operational Safety, Emergency Preparedness & Response
    Biofuel production presents operational safety hazards because of the presence of flammable and explosive substances, high temperatures, and pressurised equipment. Process safety incidents can damage facilities, injure workers, and affect the local environment and communities. Although the frequency of accidents in the industry is relatively low, when they do take place, the outcomes may be severe, with significant effects on financial performance. Damaged facilities may be inoperable for extended periods, resulting in lost revenues and large capital expenditures for repairs. Entities perceived to be at a greater risk of process safety incidents may have a higher cost of capital, while workforce injuries could result in regulatory penalties and litigation. Conversely, entities with a strong safety culture and operational safety oversight may detect and respond more effectively to such incidents, mitigating potential financial risks and improving operational efficiency.
Real Estate Remove
Access Standard
- 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.
  
  None
- 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.
- 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.
- Supply Chain Management
  The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
  
  None
- 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.
- Management of the Legal & Regulatory Environment
  The category addresses a company’s approach to engaging with regulators in cases where conflicting corporate and public interests may have the potential for long-term adverse direct or indirect environmental and social impacts. The category addresses a company’s level of reliance upon regulatory policy or monetary incentives (such as subsidies and taxes), actions to influence industry policy (such as through lobbying), overall reliance on a favorable regulatory environment for business competitiveness, and ability to comply with relevant regulations. It may relate to the alignment of management and investor views of regulatory engagement and compliance at large.
  
  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.
  
  None

General Issue Category

Remove Biofuels Access Standard

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Air Quality

Air Quality
Biofuel refineries generate air emissions that may include air pollutants and volatile organic compounds. Grain-handling equipment, boilers, wastewater treatment, and cooling, drying, distillation and fermentation units generate emissions. In most regions, such emissions typically are subject to jurisdictional regulations that limit emissions below specific thresholds. As a result, air emissions often are subject to emissions permits and abatement that may result in incremental operating and compliance costs or capital expenditures. Entities also may face regulatory penalties, as well as permit restrictions or delays from jurisdictional legal or regulatory authorities for non-compliance.

Energy Management

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

Water Management in Manufacturing
Biofuel refining is water-intensive. Biorefineries require water for feedstock processing, fermentation, distillation and cooling. Although water use at biorefineries is modest relative to the quantities consumed during feedstock crop production, it is concentrated, and thus may affect local water resources. Facilities also may generate wastewater containing salts, organic compounds, dissolved solids, phosphorus and other substances, requiring wastewater treatment. Biofuel refineries also may face reduced water availability, related cost increases or operational disruptions. Water extraction from particular areas for refining, as well as contamination of water supplies because of refining operations, also could create regulatory risk and tensions with local communities. Water efficiency in operations and the proper treatment of effluents are therefore important for biofuels entities.

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.

Product Design & Lifecycle Management

Lifecycle Emissions Balance
The rapid growth in global biofuels production has been encouraged by government energy policies that seek to reduce net GHG emissions from transportation fuels and dependence on fossil fuels. Most major renewable-fuel policies worldwide require that biofuels achieve lifecycle GHG emissions reductions relative to a fossil-fuel baseline to qualify for renewable fuel-mandate thresholds. The biofuel lifecycle emission calculation may include indirect and direct emissions from feedstock crop production and land use, fuel refining, fuel and feedstock transport, and vehicle exhaust emissions. Biofuel producers may influence net emissions directly during the refining process through energy management (fuel use), process innovations and by using feedstocks with lower emissions profiles. Fuel products that achieve a reduction in net emissions may qualify as advanced biofuels, which could increase future demand. Biofuel entities that cost-effectively reduce product net carbon emissions may gain a competitive product advantage, spur revenue growth and increase market share.

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.

Supply Chain Management

Sourcing & Environmental Impacts of Feedstock Production
The Biofuels industry uses a variety of plant-based feedstocks for production. Most entities purchase feedstocks from agricultural producers and distributors. A growing proportion of the world’s arable land now is occupied by biofuel crops. Unsustainable cultivation practices can have negative environmental externalities, including deforestation and biodiversity loss, soil degradation, and water pollution. These factors may affect feedstock crop yields adversely over the short- and long-term. This, in turn, may influence the price and availability of feedstocks for biofuels producers. Consequently, vetting the sustainability of supply chains, such as through certifications or engagement with suppliers, is an important consideration for biofuels producers.

Physical Impacts of Climate Change

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.

Management of the Legal & Regulatory Environment

Management of the Legal & Regulatory Environment
The Biofuels industry is dependent on government policies and regulations that create market demand and incentivise supply with tax breaks and other support for feedstock production. The Biofuels industry supports some regulations and policies related to renewable fuel policy, production tax credits and feedstock production. While regulatory support can result in positive short-term gains by supporting the biofuels market, the potential long-term adverse environmental impacts from feedstock and biofuels production may result in a reversal of beneficial policies, leading to a more uncertain regulatory environment. Consequently, biofuels entities may benefit from developing clear strategies for engaging regulators that are aligned with long-term sustainable business outcomes and that account for environmental externalities.

Critical Incident Risk Management

Operational Safety, Emergency Preparedness & Response
Biofuel production presents operational safety hazards because of the presence of flammable and explosive substances, high temperatures, and pressurised equipment. Process safety incidents can damage facilities, injure workers, and affect the local environment and communities. Although the frequency of accidents in the industry is relatively low, when they do take place, the outcomes may be severe, with significant effects on financial performance. Damaged facilities may be inoperable for extended periods, resulting in lost revenues and large capital expenditures for repairs. Entities perceived to be at a greater risk of process safety incidents may have a higher cost of capital, while workforce injuries could result in regulatory penalties and litigation. Conversely, entities with a strong safety culture and operational safety oversight may detect and respond more effectively to such incidents, mitigating potential financial risks and improving operational efficiency.

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