Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Industrial Machinery & Goods Industrial machinery and goods industry entities manufacture equipment for a variety of industries including construction, agriculture, energy, utility, mining, manufacturing, automotive and transportation. Products include engines, earth-moving equipment, trucks, tractors, ships, industrial pumps, locomotives and turbines. Machinery manufacturers use large amounts of raw materials for production, including steel, plastics, rubber, paints and glass. Manufacturers also may machine and cast parts before final assembly. Demand in the industry is tied closely to industrial production, while government emissions standards and customer demand are encouraging innovations to improve energy efficiency and limit air emissions during product use.
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  • Coal Operations The Coal Operations industry includes entities that mine coal and those that manufacture coal products. Mining activity covers both underground and surface mining, and thermal and metallurgical coal.
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Relevant Issues for both Industries (12 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.
  • Industrial Machinery & Goods Remove
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    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management Energy is a critical input in industrial machinery manufacturing. Purchased electricity is the largest share of energy expenditure in the industry, followed by purchased fuels. The type of energy used, amount consumed and energy management strategies depend on the type of products manufactured. Including the use of electricity generated on site, grid-sourced electricity and alternative energy, an entity’s energy mix can influence the cost and reliability of energy supply and, ultimately, affect the entity’s cost structure and regulatory risk.
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
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    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
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    • Ecological Impacts The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.
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    • Human Rights & Community Relations The category addresses management of the relationship between businesses and the communities in which they operate, including, but not limited to, management of direct and indirect impacts on core human rights and the treatment of indigenous peoples. More specifically, such management may cover socio-economic community impacts, community engagement, environmental justice, cultivation of local workforces, impact on local businesses, license to operate, and environmental/social impact assessments. The category does not include environmental impacts such as air pollution or waste which, although they may impact the health and safety of members of local communities, are addressed in separate categories.
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    • 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 Health & Safety The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.
      • Workforce Health & Safety Employees in industrial machinery manufacturing facilities face health and safety risks from exposure to heavy machinery, moving equipment and electrical hazards, among others. Creating an effective safety culture is critical to mitigate safety incidents proactively, which may result in reduced healthcare costs, litigation and work disruption. By implementing strong safety protocols, including incident reporting and investigation, and promoting a culture of safety, entities can minimise safety-related expenses and potentially improve productivity in 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.
      • Fuel Economy & Emissions in Use-phase Many of the Industrial Machinery & Goods industry’s products are powered by fossil fuels and release greenhouse gases (GHGs) and other air emissions during use. Customer preferences for improved fuel economy combined with regulations restricting emissions are increasing the demand for energy-efficient and lower-emission products in the industry. As such, entities that develop products with these characteristics may capture expanding market share, reduce regulatory risk and improve brand value.
    • Business Model Resilience The category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
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    • 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 Industrial machinery entities are exposed to supply chain risks when critical materials are used in products. Entities in the industry manufacture products using critical materials with few or no available substitutes, many of which are sourced in only a few countries, which may be subject to geopolitical uncertainty. Entities in this industry also face competition because of increasing global demand for these materials from other sectors, which may result in price increases and supply risks. Entities that limit the use of critical materials by using alternatives, as well as securing supply, may mitigate financial effects stemming from supply disruptions and volatile input prices.
      • Remanufacturing Design & Services Industrial machinery and goods manufacturing uses large quantities of steel, iron, aluminium, glass, plastics and other materials. Remanufacturing industrial machinery systems (called ‘cores’) presents an opportunity for industrial machinery entities to limit the quantity of raw materials needed to produce new machinery, as well as reduce the time and other resources required to produce finished goods. Remanufactured products also may create value from products otherwise destined for disposal or recycling. Industrial machinery entities may achieve cost savings by reusing end-of-life parts to build remanufactured machines, which may be resold to customers. Thus, remanufacturing in process and design may reduce demand for raw materials, decrease manufacturing costs and create new sales channels.
    • Critical Incident Risk Management The category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur.
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  • Coal Operations Remove
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    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
      • Greenhouse Gas Emissions Coal operations are energy intensive and generate significant direct greenhouse gas (GHG) emissions, including carbon dioxide from fuel use and methane released from coal beds during mining and post-mining activities. Regulatory efforts to reduce GHG emissions in response to the risks posed by climate change may result in higher operating and capital expenditures based on the magnitude of their direct emissions. Operational efficiencies can be achieved through the cost-effective reduction of GHG emissions. Such efficiencies can mitigate the potential financial impact of increased fuel costs from regulations that limit—or put a price on—GHG emissions.
    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
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    • 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 Coal operations have an impact on both the quality and quantity of local water resources. Coal operations are water intensive. The use of water in coal washing to remove sulphur, cool drilling equipment and transport coal in slurry pipelines can impact resources. The severity of these risks can vary depending on the region’s water availability and the regulatory environment. Reducing water use and contamination also could create operational efficiencies for entities and lower their operating costs. Wastewater treatment and discharge often is regulated by jurisdictional authorities. Violating limits on selenium, sulphate and dissolved solids could affect coal operations entities through significant penalties, compliance costs, delays in production or higher costs related to mine closure.
    • 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 The Coal Operations industry generates large volumes of mineral and non-mineral waste, including process refuse, liquid coal waste, and solid rock and clay waste, which may contain toxic elements such as mercury, arsenic or cadmium. Waste produced during coal mining and processing operations can, depending on its type, be treated, discarded, or stored off- or on-site, in impoundments or disused mine pits. Improper disposal or storage of hazardous materials or mining waste can present significant long-term threats to human health and ecosystems through potential contamination of groundwater or surface water used for drinking or agriculture, posing operational and regulatory challenges for entities. Entities that reduce waste streams, effectively manage risks related to waste containing heavy metals and maintain rigorous hazardous waste disposal practices may reduce regulatory and litigation risks, remediation liabilities and operating costs.
    • Ecological Impacts The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.
      • Biodiversity Impacts Coal operations can have a range of impacts on biodiversity. Surface mining and mountaintop removal can alter the landscape, removing vegetation and wildlife habitats. A particularly concerning effect of coal operations is acid rock drainage, in which surface and shallow subsurface water encounters coal mining overburden, contaminating the water with heavy metals and rendering it highly acidic, with harmful effects on humans, animals and vegetation. Biodiversity impacts of coal operations can affect the valuation of reserves and create operational risks. Because of increasing interest in the protection of ecosystems, the environmental characteristics of the land where reserves are located may lead to higher extraction costs. Entities might also face regulatory or reputational barriers to accessing reserves in ecologically sensitive areas, such as new protection status afforded to areas where reserves are located. Coal operations entities face regulatory risks related to reclamation after a mine is decommissioned, in accordance with applicable regulatory requirements to restore mined property according to a prior, approved reclamation plan. Material costs may arise from removing or covering refuse piles, fulfilling water treatment obligations and dismantling infrastructure at decommissioning. Furthermore, coal operations are subject to laws protecting endangered species. Entities with an effective environmental management plan for each stage of the project lifecycle may minimise their compliance costs and legal liabilities, face less resistance in developing new mines, avert delays in project completion, and avoid difficulties in obtaining permits, accessing reserves and completing projects.
    • Human Rights & Community Relations The category addresses management of the relationship between businesses and the communities in which they operate, including, but not limited to, management of direct and indirect impacts on core human rights and the treatment of indigenous peoples. More specifically, such management may cover socio-economic community impacts, community engagement, environmental justice, cultivation of local workforces, impact on local businesses, license to operate, and environmental/social impact assessments. The category does not include environmental impacts such as air pollution or waste which, although they may impact the health and safety of members of local communities, are addressed in separate categories.
      • Rights of Indigenous Peoples Entities in the Coal Operations industry can operate and hold assets in areas occupied by indigenous peoples. Entities perceived as contributing to human rights violations or failing to account for indigenous peoples’ rights may be affected by protests, riots or suspension of permits. These entities could face substantial costs related to compensation or settlement payments, and write-downs in the value of their reserves in such areas. In the absence of applicable jurisdictional laws or regulations to address such cases, several international instruments have emerged to provide guidelines for entities. These instruments include obtaining the free, prior and informed consent of indigenous peoples for decisions that affect them. Several countries have implemented specific laws protecting indigenous peoples’ rights, creating increasing regulatory risk for entities that violate those rights.
      • Community Relations Coal operations take place over many years and can have a wide range of adverse effects on communities. Community rights and interests may be affected by the environmental and social impacts of operations, air emissions, waste generation, wastewater discharges and decommissioning activities. Entities often need support from local communities to obtain permits and leases and conduct their activities without disruptions. The expected value of reserves could be affected if the community interferes or lobbies its government to interfere with the rights of a coal entity to extract those reserves. In addition to community concerns about the direct impacts of projects, the presence of coal mining activities may create associated socioeconomic concerns related to education, health and livelihoods. Coal entities that engage in rent-seeking and exploiting a community’s resources without providing proportional socioeconomic benefits in return may be exposed to actions by host governments and communities that restrict their activities or impose additional costs. Entities in the extractives industries can adopt various community engagement strategies in their global operations to manage risks and opportunities associated with community rights and interests, such as integrating community engagement into each phase of the project cycle. Entities that adopt a ‘shared value’ approach may be able to provide significant socioeconomic benefits to communities and allow them to operate profitably.
    • 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 Relations Working conditions related to coal operations are usually physically demanding and hazardous. Labour unions play an important role in representing workers’ interests and managing collective bargaining for better wages and working conditions. This makes the management of labour relations critical, since conflict with workers can result in labour strikes and other disruptions that can delay or stop production, leading to lost revenue and reputational damage. Persistent labour disputes can adversely affect the long-term profitability of the entity.
    • Employee Health & Safety The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.
      • Workforce Health & Safety Safety is critical to coal mining operations because of the hazardous working conditions involved. Fatalities and injuries can result from the many hazards associated with the industry, including accidents, cave-ins, explosions and flooding. Because of these hazards, the industry is characterised by higher-than-average mortality and injury rates. Coal miners are also susceptible to long-term health risks such as chronic lung disease as well as mental health problems. Some jurisdictional health and safety laws protect coal mining workers and may provide compensation for work-related chronic illnesses that can impose additional costs on entities or result in regulatory penalties. An entity’s ability to protect employee health and safety, and to create a culture of safety and well-being among employees, may prevent accidents, mitigate costs, reduce operational downtime and enhance workforce productivity.
    • 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.
      None
    • Business Model Resilience The category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
      • Reserves Valuation & Capital Expenditures Coal entities may be unable to extract a significant proportion of their coal reserves if greenhouse gas (GHG) emissions are controlled to limit global temperature increases. Stewardship of capital resources while considering medium- to long-term trends, particularly related to climate change mitigation actions, is critical to prevent asset impairment and maintain profitability and creditworthiness. Globally, regulations and policies are and may continue to be put into place to limit GHG emissions from coal-fired power plants—the customers of coal entities—thus reducing demand for and the price of coal. Coal demand also is being affected by regulations governing other harmful air emissions that apply to coal-fired power plants. An expansion of GHG-mitigation regulations may increase the magnitude of potential financial impacts in the medium to long term. Along with improved competitiveness of alternative energy technologies, these jurisdictional regulations and policies pose long-term risks for the reserves and capital investments of coal operations entities.
    • 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
    • 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.
      • Tailings Storage Facilities Management Coal waste impoundments or fine coal refuse ponds, also called tailings storage facilities (TSFs), can leak and contaminate water supplies if mismanaged, potentially leading to adverse impacts on the environment and human health. These impacts may carry financial implications such as regulatory penalties, compensation payments, and remediation or compliance obligations. Entities’ ability to reduce the number and size of fine coal refuse ponds and ensure the structural integrity of impoundments can minimise such impacts. A catastrophic failure of such facilities (for example, a dam failure) could still release significant volumes of waste and materials that are harmful to the environment, leading to severe impacts on ecosystems, human livelihood, and local economies and communities. Such catastrophic incidents may result in significant financial losses for entities and may impair their social licence to operate. Robust processes and approaches to tailings facility design, management, operation and closure, as well as appropriate management of associated risks, can help prevent such incidents from occurring. Entities that adopt robust practices to maintain the safety of TSFs may do so through ensuring accountability for tailings management at the highest levels of the entity, conducting frequent internal and external independent technical reviews of TSFs, and ensuring mitigation measures are implemented in a timely manner in case of a safety concern. Additionally, a strong safety culture and well-established emergency preparedness and response plans can mitigate the impacts and financial implications of such events. Entity obligations related to long-term remediation and compensation for damages may result in additional financial effects in case of failure. An entity’s ability to meet such obligations after an incident has occurred is an additional component of emergency preparedness.

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