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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  • Rail Transportation Rail Transportation industry entities provide rail freight shipping and support services. Important activities include shipping containerised and bulk freight, including consumer goods and commodities. Rail entities typically own, maintain and operate their rail networks, which may require significant capital expenditures. The industry exhibits economies of density because of its network effects, potentially fostering natural monopoly conditions. Together with the large sunk costs of rail infrastructure, this provides a competitive advantage to incumbent entities in the industry and creates barriers to entry for new entities.
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Relevant Issues for both Industries (8 of 26)

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

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
  • 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).
      None
    • Air Quality The category addresses management of air quality impacts resulting from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes) as well as industrial emissions. Relevant airborne pollutants include, but are not limited to, oxides of nitrogen (NOx), oxides of sulfur (SOx), volatile organic compounds (VOCs), heavy metals, particulate matter, and chlorofluorocarbons. The category does not include GHG emissions, which are addressed in a separate category.
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management 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.
    • 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.
    • 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.
    • Competitive Behaviour The category covers social issues associated with existence of monopolies, which may include, but are not limited to, excessive prices, poor quality of service, and inefficiencies. It addresses a company’s management of legal and social expectation around monopolistic and anti-competitive practices, including issues related to bargaining power, collusion, price fixing or manipulation, and protection of patents and intellectual property (IP).
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    • 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
  • Rail Transportation 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 The Rail Transportation industry generates emissions mainly through the combustion of diesel in locomotive engines. Despite relatively low emissions compared to other transportation industries, fuel management has implications for industry entities in terms of operating costs and regulatory compliance. Greenhouse gases (GHGs) including carbon dioxide (CO2) are of particular importance to government regulators concerned about climate change. Intensifying regulation of locomotive exhaust emissions and high fuel costs encourage rail entities to invest in fuel efficiency enhancements to manage emissions. These investments can improve an entity’s operational efficiency and cost structure, with effects on value and competitive position both within the industry and compared to other modes of transport.
    • 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 Rail operations emit several types of air pollutants regulated under national and international laws. These air pollutants can create significant and localised environmental and health impacts. For example, locomotive engines idling at rail yards may be a health concern for nearby human populations because HAPs such as benzene are known human carcinogens. Nitrogen oxides (NOx) are a major component of smog and acid rain. At the same time, fuel is a significant industry cost. Rail entities that implement fuel efficiency enhancements and manage emissions may witness reduced costs in both the short and longer term.
    • 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
    • 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 Moving freight by rail includes the risk of accidents and unintended releases of hazardous materials. These events may harm employee health and well-being as well as have negative financial effects on entities, such as reduced productivity, higher employee turnover and increased insurance costs. Poor employee health also may cause accidents. A healthy workforce, strong safety culture, thorough and systematic approach to safety, risk management programmes (including emergency preparedness and response), and operational integrity at all levels of an entity may reduce the probability and magnitude of rail accidents.
    • 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
    • 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
    • Competitive Behaviour The category covers social issues associated with existence of monopolies, which may include, but are not limited to, excessive prices, poor quality of service, and inefficiencies. It addresses a company’s management of legal and social expectation around monopolistic and anti-competitive practices, including issues related to bargaining power, collusion, price fixing or manipulation, and protection of patents and intellectual property (IP).
      • Competitive Behaviour Industry consolidation and prior allegations of anti-competitive practices in relation to captive shippers, among other reasons, threaten the anti-trust immunity granted to railroads in some regions. Some of the proposed policy changes may result in significant costs or impede investment in the industry. Rail entities operating at the limits of allowable charges in areas where they have market dominance, or those not complying with applicable jurisdictional legally or regulatory enforced rate structures, may face increased regulatory scrutiny. Any associated fines or penalties may affect an entity’s valuation negatively by increasing its cost of capital. In an environment of increased concerns about the market power and pricing practices of rail entities, competitive pricing and transparency in rate-setting while achieving adequate returns on investment is in their continued best interest.
    • 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.
      • Accident & Safety Management Rail accidents and unintended releases of hazardous materials have negative repercussions for the environment and communities along railroad tracks, as well as financial effects on entities themselves. Increasingly stringent safety regulations and the potential for significant costs following major accidents encourage entities to manage their safety performance with robust safety management systems. In addition, losing consumer confidence after such events may reduce revenues and damage an entity’s social licence to operate, increasing its cost of capital.

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