Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Semiconductors Semiconductors industry entities design or manufacture semiconductor devices, integrated circuits, their raw materials and components, or capital equipment. Some entities in the industry provide outsourced manufacturing, assembly or other services for designers of semiconductor devices.
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  • Gas Utilities & Distributors The Gas Utilities & Distributors industry consists of gas distribution and marketing entities. Gas distribution involves operating local, low-pressure pipes to transfer natural gas from larger transmission pipes to end users. Gas marketing entities are gas brokers that aggregate and deliver natural gas in quantities that meet the needs of various customers, generally through other entities’ transmission and distribution lines. A relatively smaller portion of this industry is involved in propane gas distribution; therefore, this standard is focused on natural gas distribution. Both types of gas are used for heating and cooking by residential, commercial and industrial customers. In regulated markets, the utility is granted a full monopoly over the distribution and sale of natural gas. A regulator must approve the rates utilities charge to prevent the abuse of their monopoly position. In deregulated markets, distribution and marketing are separated legally, and customers have a choice of which entity from which to buy their gas. In this case, a common carrier utility is guaranteed a monopoly only over distribution and is required legally to transmit all gas equitably along its pipes for a fixed fee. Overall, entities must provide safe, reliable, low-cost gas, while effectively managing their social and environmental impacts, such as community safety and methane emissions.
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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.
  • Semiconductors 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 Entities in the Semiconductors industry generate greenhouse gas (GHG) emissions, particularly those from perfluorinated compounds, from semiconductor manufacturing operations. GHG emissions may create regulatory compliance costs and operating risks for semiconductors entities, although resulting financial effects may vary depending on the magnitude of emissions and the prevailing emissions regulations. Entities that cost-effectively manage GHG emissions through greater energy efficiency, the use of alternative chemicals or manufacturing process advances may benefit from improved operating efficiency and reduced regulatory risk.
    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management in Manufacturing Energy is a critical input for manufacturing semiconductor devices. The price of conventional grid electricity and volatility of fossil fuel prices may increase because of evolving climate change regulations and new incentives for energy efficiency and renewable energy, among other factors, while alternative energy sources become more cost-competitive. Decisions regarding energy sourcing and type, as well as alternative energy use, may create trade-offs related to the energy supply’s cost and reliability for operations. As industry innovation adds complexity to manufacturing processes, new technologies to manufacture semiconductors may consume more energy unless entities invest in the energy efficiency of their operations. The way an entity manages energy efficiency, reliance on different types of energy, the associated sustainability risks, and alternative energy source access may affect financial performance.
    • 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 Water is critical to the semiconductor production process, which requires significant volumes of ‘ultra-pure’ water for cleaning purposes, to avoid trace molecules from affecting product quality. As manufacturing becomes more complex, entities in the industry are discovering the importance of reducing ultra-pure water use. Water is becoming a scarce resource around the world, because of increasing consumption from population growth and rapid urbanisation, and reduced supplies because of climate change. Furthermore, water pollution in developing countries makes available water supplies unusable or expensive to treat. Without careful planning, water scarcity may result in higher supply costs, social tensions with local communities and governments, or loss of water access in water-scarce regions, thereby presenting a critical risk to production. Semiconductor entities that increase water use efficiency during manufacturing may maintain a lower risk profile and face reduced regulatory risks as local, regional and national environmental laws place increasing emphasis on resource conservation.
    • 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 Semiconductor manufacturing requires hazardous materials, many of which are subject to environmental, health and safety regulations, and generate harmful waste, which may be released into the environment in the form of water and air emissions, as well as solid waste. The handling and disposal of hazardous wastes produced during manufacturing may result in increased operating costs, capital expenditures, and in some instances, regulatory costs. Entities that reduce waste produced during manufacturing and ensure it is reused, recycled or disposed of appropriately may achieve a lower risk profile and face reduced regulatory risks as local, regional and national environmental laws place increasing emphasis on resource conservation and waste management.
    • Access & Affordability The category addresses a company’s ability to ensure broad access to its products and services, specifically in the context of underserved markets and/or population groups. It includes the management of issues related to universal needs, such as the accessibility and affordability of health care, financial services, utilities, education, and telecommunications.
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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 The long-term effects of chemical usage in semiconductor manufacturing on worker health is a major area of concern for the industry. Workers in fabrication facilities, particularly maintenance workers, are at risk of exposure to chemicals known to be hazardous to human health. Violations of health and safety standards may result in monetary penalties and additional costs of corrective actions, with effects on net profits and contingent liabilities. Furthermore, such violations also may result in non-monetary penalties and reputational impacts which may decrease revenues, as well as market share. Effective management of health and safety issues include implementing effective engineering controls, introducing less hazardous chemicals if possible or using smaller amounts, and seeking chemicals presenting the fewest risks to the workforce. In addition to protecting brand value, entities taking these measures may also protect themselves from adverse legal outcomes related to both regulated and unregulated hazardous substances.
    • 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.
      • Recruiting & Managing a Global & Skilled Workforce Employees are important contributors to value creation in the Semiconductors industry. Entities face competition and challenges in recruiting qualified employees globally, including electrical engineers, research scientists and process engineers. Compensation for such employees is a significant cost component for the industry. Semiconductors entities may improve their competitive positioning by establishing education, training and recruitment policies that develop and leverage the talents of skilled, global employees to meet their human capital needs. Such initiatives may help drive innovation and improve worker productivity, thereby improving access to new markets and possible new sources of revenue, while also creating a more engaged workforce and reducing employee turnover.
    • Product Design & Lifecycle Management The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.
      • Product Lifecycle Management As an increasing number of devices become connected to each other and to the internet, semiconductor entities face greater demand for products that increase computing power and decrease energy costs. Semiconductor machinery and device manufacturers may reduce the environmental and human health impacts of their products by increasing the energy-efficiency of equipment and chips and reducing the use of harmful materials in products. As consumer demand grows for energy-efficient devices that increase battery life, reduce heat output and decrease energy consumption, semiconductor manufacturers that satisfy these may gain a competitive advantage, driving revenue and market share growth. Entities also may benefit from reducing the use of toxic materials from chips destined for consumer devices, which has implications for the end-of-life management of electronic waste, an issue of growing legislative importance in many countries.
    • 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 Entities in the Semiconductors industry rely on numerous critical materials as important inputs for finished products. Many of these inputs have few or no available substitutes and often are sourced from only a few countries, many of which may be subject to geopolitical uncertainty. Other sustainability impacts related to climate change, land use, resource scarcity and conflict in regions where the industry’s supply chain operates are also increasingly shaping the industry’s ability to source materials. Additionally, increased competition for these materials because of growing global demand from other sectors may result in price increases and supply risks. The management of potential materials shortages, supply disruptions, price volatility and reputational risks is made more difficult by the practice of commonly sourcing materials from supply chains that often lack transparency. Failure to effectively manage this issue may constrain access to necessary materials, reduce margins, impair revenue growth or increase costs of capital.
    • 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).
      • Intellectual Property Protection & Competitive Behaviour Although intellectual property (IP) protection is inherent to the Semiconductors industry business model, entities’ IP practices may be a contentious social issue. IP protection can be an important driver of innovation, but some entities may also acquire and enforce patents and other IP protection to restrict competition, particularly if they are dominant market players. Industry standard-setting can involve complex negotiations over patent rights and licensing terms, and entities use cross-licenses and patent pools to address difficulties around patent thickets. However, such industry cooperation also may raise antitrust concerns, for example, with provisions in portfolio cross-licenses that could enable price fixing. Adverse legal or regulatory rulings related to antitrust and IP may expose software and IT services entities to costly and lengthy litigations and potential monetary losses as a result. Such rulings may also affect an entity’s market share and pricing power, if its patents or dominant position in important markets are challenged legally, with significant financial consequences. Therefore, entities that balance the IP protection and its use to spur innovation and ensure their IP management and other business practices do not unfairly restrict competition may reduce regulatory scrutiny and legal actions while protecting market value.
    • 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
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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
    • 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.
      None
    • 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.
      None
    • Access & Affordability The category addresses a company’s ability to ensure broad access to its products and services, specifically in the context of underserved markets and/or population groups. It includes the management of issues related to universal needs, such as the accessibility and affordability of health care, financial services, utilities, education, and telecommunications.
      • Energy Affordability An objective of gas utilities is to deliver natural gas to customers in a safe, reliable and environmentally responsible manner. Entities in the industry manage these potentially competing priorities while maintaining favourable relations with customers and regulators—and ultimately to earn appropriate shareholder returns. From the utility customer perspective, the affordability of energy is challenging to balance, because it often conflicts with other core objectives. Utility energy bills generally are perceived to be increasingly more expensive for low-income customers (affordability is determined by both the net cost of energy bills and the underlying economics of customers). Ensuring utility bills remain affordable is crucial for utilities in building trust (intangible asset value) with regulators and customers. The quality of regulatory relations is an important value driver for utilities, and one of the issues analysed closely by investment analysts. Regulators’ willingness, or lack thereof, to grant rate requests, rate structure modifications, cost recovery and allowed returns is a primary determinant of financial performance and investment risk. Effectively managing affordability may provide opportunities to grow capital investment, revise rate structures favourably and increase allowed returns. Furthermore, utilities that ineffectively manage affordability increasingly face customers reducing their reliance upon natural gas (or reducing energy needs) and pursuing alternative energy sources (for example, industrial customers’ use of combined heat and power). Managing affordability involves operating an efficient business with a comprehensive, long-term strategy, as well as working closely with regulators and public policymakers on rate structures and, potentially, bill-assistance programmes. Although utility business models and rate structures largely determine the precise nature of the financial effects, affordability is a critical business issue for utilities managing, maintaining and growing their customer bases, building intangible asset value, creating investment and return opportunities, and ultimately delivering shareholder returns.
    • 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.
      None
    • 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.
      None
    • 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.
      • End-Use Efficiency Natural gas produces fewer greenhouse gas (GHG) emissions than other fossil fuels. Expanding its use in the economy may be an important strategy for many governments and regulators striving to reduce GHG emissions. However, despite the relatively lower emissions, the natural gas value chain still produces meaningful levels of GHG emissions overall. As policymakers and regulators seek to mitigate climate change, the efficient consumption of natural gas will be an important long-term theme. Energy efficiency is a low-lifecycle-cost method to reduce greenhouse gas (GHG) emissions. Utilities can offer customers a wide range of options to promote energy efficiency, including providing rebates for energy-efficient appliances, weatherising customers’ homes and educating customers on energy saving methods. Overall, entities that sponsor efficiency initiatives may reduce the downside risks from demand fluctuations, gain returns on needed investments, decrease operating costs and earn higher risk-adjusted returns over the long term.
    • 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).
      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.
      • Integrity of Gas Delivery Infrastructure Operating a vast network of gas pipelines, equipment and storage facilities requires a multifaceted, long-term approach to ensuring infrastructure integrity and managing related risks. Although customers depend on reliable gas supplies, entities manage substantial risks—including those related to human health, property and greenhouse gas (GHG) emissions—that result from operating gas distribution networks and related infrastructure. Ageing infrastructure, inadequate monitoring and maintenance, and other operational factors may result in gas leaks. Gas leak safety-related risks, such as losses of containment, may result in fires or explosions that can be particularly dangerous in urban areas where entities often operate. Furthermore, gas leaks also result in fugitive emissions (methane), causing adverse environmental impacts. Regulated gas utilities generally incur no direct costs for gas leaks, because the cost of gas typically is passed on to customers (though this may vary by region). However, gas leaks that result in safety-related risks or fugitive emissions may affect entities financially through a variety of regulatory, legal and product demand channels. Accidents, particularly fatal accidents, may result in negligence claims against entities, leading to costly court battles and fines. GHG emissions may result in increased regulatory scrutiny—a critical element directly connected to financial performance, given the importance of regulatory relations—and potential fines and penalties. Importantly, regulated gas utilities can financially benefit from capital investment opportunities to improve performance and mitigate risks related to safety and emissions, which can be factored into their rate base. Entities manage such risks through pipeline replacements, regular inspections and monitoring, employee training and emergency preparedness, investments in technology, and other strategies such as working closely with regulators. In response to concerns about ageing infrastructure, many entities are seeking ways to expedite the replacement permitting and approval process, especially in cases where pipelines are located near densely populated areas.

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