Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Advertising & Marketing The Advertising and Marketing industry is comprised of entities that create advertising campaigns for use in media, display, or direct mail advertising and related services including market research. Advertising and marketing entities are engaged primarily by businesses selling consumer products, entertainment, financial services, technology products, and telecommunication services. Larger advertising entities are structured as holding entities, owning multiple agencies across the globe that provide a wide range of services such as custom publishing, brand consultancy, mobile and online marketing, and public relations. For any advertising campaign, the same entity may be engaged in all aspects, from graphic arts and content creation to data analytics, marketing research, and media planning and buying, or the entity may be in charge only of certain aspects.
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  • Asset Management & Custody Activities Asset Management & Custody Activities industry entities manage investment portfolios on a commission or fee basis for institutional, retail and high net-worth investors. In addition, entities in this industry provide wealth management, private banking, financial planning, and investment advisory and retail securities brokerage services. Investment portfolios and strategies may be diversified across multiple asset classes, which may include equities, fixed income and hedge fund investments. Specific entities are engaged in venture capital and private equity investments. The industry provides essential services to a range of customers from individual retail investors to large, institutional asset owners to meet specified investment goals. Entities in the industry range from large multi-jurisdictional asset managers with a wide range of investable products, strategies and asset classes to small boutique entities providing services to specific market niches. While large entities generally compete based on management fees charged for their services as well as their potential to generate superior investment performance, the smaller entities generally compete on their ability to provide products and services customised to satisfy the diversification needs of individual clients. The global 2008 financial crisis and subsequent regulatory regime developments highlight the industry’s importance in providing fair advice to customers and managing risks at the entity, portfolio and macroeconomic levels.
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Relevant Issues for both Industries (5 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.
  • Advertising & Marketing Remove
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    • Customer Privacy The category addresses management of risks related to the use of personally identifiable information (PII) and other customer or user data for secondary purposes including but not limited to marketing through affiliates and non-affiliates. The scope of the category includes social issues that may arise from a company’s approach to collecting data, obtaining consent (e.g., opt-in policies), managing user and customer expectations regarding how their data is used, and managing evolving regulation. It excludes social issues arising from cybersecurity risks, which are covered in a separate category.
      • Data Privacy Because of the prevalence of social media, location-based mobile applications and e-commerce, customers’ digital footprints offer a more complete picture of their habits than might otherwise be available to advertisers. Advertisers can collect or purchase highly detailed information about buyers, and advertising strategies can be precisely targeted to potential buyers. As part of an industry that uses large quantities of data about private citizens, advertising and marketing entities must balance the potential benefits of targeted advertising with protecting customer data and privacy.
    • Selling Practices & Product Labeling The category addresses social issues that may arise from a failure to manage the transparency, accuracy, and comprehensibility of marketing statements, advertising, and labeling of products and services. It includes, but is not limited to, advertising standards and regulations, ethical and responsible marketing practices, misleading or deceptive labeling, as well as discriminatory or predatory selling and lending practices. This may include deceptive or aggressive selling practices in which incentive structures for employees could encourage the sale of products or services that are not in the best interest of customers or clients.
      • Advertising Integrity Entities have a legal responsibility to ensure their products and services advertising is truthful and not deceptive. Although much of the regulatory compliance burden regarding advertising content and placement lies with the client, advertising agencies play a vital role in the creation of advertising content and are responsible for advising clients regarding applicable regulations. Consumer protection laws provide guidance and restrictions on advertising to children and on advertising regulated products, such as alcohol and tobacco. Regulators may investigate advertising agency involvement in deceptive advertising and penalise the agency. Advertising and marketing entities exposed to these regulations and concerns have responded by participating in self-regulatory programmes that manage these areas.
    • Employee Engagement, Diversity & Inclusion The category addresses a company’s ability to ensure that its culture and hiring and promotion practices embrace the building of a diverse and inclusive workforce that reflects the makeup of local talent pools and its customer base. It addresses the issues of discriminatory practices on the bases of race, gender, ethnicity, religion, sexual orientation, and other factors.
      • Workforce Diversity & Inclusion In the Advertising & Marketing industry, an entity gains competitive advantages from producing creative, innovative ideas. Entities in this industry compete for talented workers to create successful advertising campaigns. Larger entities have clients around the world and must employ a diverse workforce to reach diverse audiences effectively. Connecting with a target market relies, to a significant extent, on employing a workforce that reflects the communities in that market. A diverse workforce is a critical factor in improving service outcomes and enhancing an advertising entity’s financial performance.
    • Product Design & Lifecycle Management The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.
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    • Business Ethics The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.
      None
  • Asset Management & Custody Activities Remove
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    • Customer Privacy The category addresses management of risks related to the use of personally identifiable information (PII) and other customer or user data for secondary purposes including but not limited to marketing through affiliates and non-affiliates. The scope of the category includes social issues that may arise from a company’s approach to collecting data, obtaining consent (e.g., opt-in policies), managing user and customer expectations regarding how their data is used, and managing evolving regulation. It excludes social issues arising from cybersecurity risks, which are covered in a separate category.
      None
    • Selling Practices & Product Labeling The category addresses social issues that may arise from a failure to manage the transparency, accuracy, and comprehensibility of marketing statements, advertising, and labeling of products and services. It includes, but is not limited to, advertising standards and regulations, ethical and responsible marketing practices, misleading or deceptive labeling, as well as discriminatory or predatory selling and lending practices. This may include deceptive or aggressive selling practices in which incentive structures for employees could encourage the sale of products or services that are not in the best interest of customers or clients.
      • Transparent Information & Fair Advice for Customers Asset managers have legal obligations and fiduciary duties related to record keeping, operating and marketing, disclosure requirements and prevention of fraudulent activities. Regulations regarding Asset Management & Custody Activities are intended to align the interests of entities and their clients, limiting conflicts of interest. This alignment, along with the prevalence of asset managers earning fees based on the amount of assets under management, encourages entities to provide clients with investment strategies that match clients’ risk-return profiles. Entities also face significant challenges in ensuring clients understand the nature of investment strategy risks. Failure to provide services that satisfy customer expectations may result in lengthy and costly litigation, diminished trust with clients and lower sales. Enhanced disclosure on procedures or programmes that provide adequate, clear and transparent information about products and services, employees’ regulatory violation records and the amount of fines and settlements associated with professional integrity will provide investors with an advanced understanding of how well entities manage risks associated with this issue and whether they are able to preserve long-term value for shareholders.
    • Employee Engagement, Diversity & Inclusion The category addresses a company’s ability to ensure that its culture and hiring and promotion practices embrace the building of a diverse and inclusive workforce that reflects the makeup of local talent pools and its customer base. It addresses the issues of discriminatory practices on the bases of race, gender, ethnicity, religion, sexual orientation, and other factors.
      • Employee Diversity & Inclusion Entities in the Asset Management & Custody Activities industry face significant competition for skilled employees. As the industry continues to undergo rapid innovation through the introduction of more complex financial products and computerised algorithmic and high-frequency trading, the ability of entities to attract and retain skilled employees may increase in importance. By ensuring gender and racial diversity throughout the organisation, entities may expand their candidate pools, which may reduce hiring costs and improve operational efficiency. Evidence also suggests that entities with more diverse groups of employees may enhance the risk-return characteristics of investment portfolios.
    • 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.
      • Incorporation of Environmental, Social, and Governance Factors in Investment Management & Advisory Asset Management & Custody Activities entities maintain a fiduciary responsibility to their clients. These entities must consider and incorporate an analysis of all material information into investment decisions, including environmental, social and governance (ESG) factors. The process of ESG investment involves consideration of ESG factors in valuation, modelling, portfolio construction, proxy voting and engagement with investees and, as a result, in investment decision-making by asset and wealth managers. As the management and use of non-financial forms of capital increasingly contribute to market value, incorporation of ESG factors in the analysis of investees has become more relevant. Research has established that an entity’s management of some ESG factors may impact materially both its accounting and market returns. Therefore, deep understanding of investees’ ESG performance, integration of ESG factors in valuation and modelling, as well as engagement with investees on sustainability issues allows asset managers to generate superior returns. On the other hand, asset management and custody activities industry entities that fail to consider these risks and opportunities in their investment management activities may witness diminished investment portfolio returns that may result in reduced performance fees. Over the long term, these failures could result in an outflow of assets under management (AUM), the loss of market share and lower management fees.
      • Financed Emissions Entities participating in asset management activities face risks and opportunities related to the greenhouse gas emissions associated with those activities. Counterparties, borrowers or investees with higher emissions might be more susceptible to risks associated with technological changes, shifts in supply and demand and policy change which in turn can impact the prospects of a financial institution that is providing financial services to these entities. These risks and opportunities can arise in the form of credit risk, market risk, reputational risk and other financial and operational risks. For example, credit risk might arise in relation to financing clients affected by increasingly stringent carbon taxes, fuel efficiency regulations or other policies; credit risk might also arise through related technological shifts. Reputational risk might arise from financing fossil-fuel projects. Entities participating in asset management activities are increasingly monitoring and managing such risks by measuring their financed emissions. This measurement serves as an indicator of an entity’s exposure to climate-related risks and opportunities and how it might need to adapt its investment strategies over time.
    • Business Ethics The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.
      • Business Ethics The regulatory environment surrounding the Asset Management & Custody Activities industry continues to evolve internationally. Entities must adhere to a complex and often inconsistent set of rules relating to performance and conduct, as well as provide disclosure on issues including insider trading, tax evasion and clearing requirements in over-the-counter derivatives markets. Entities are subject to strict legal requirements as fiduciaries or custodians of their clients. In some jurisdictions, enhanced rewards for whistle-blowers may increase the number of complaints brought to regulators. Entities that ensure regulatory compliance through robust internal controls may build trust with clients, increase revenue and protect shareholder value by minimising losses incurred because of legal proceedings.

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