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Software & IT Services
The Software & Information Technology (IT) Services industry offers products and services globally to retail, business and government customers, and includes entities that develop and sell applications software, infrastructure software and middleware. The industry generally is competitive but with dominant players in some segments. Although relatively immature, the industry is characterised by high-growth entities that place a heavy emphasis on innovation and depend on human and intellectual capital. The industry also includes IT services entities delivering specialised IT functions, such as consulting and outsourced services. New industry business models include cloud computing, software as a service, virtualisation, machine-to-machine communication, big data analysis and machine learning. Additionally, brand value is important for entities in the industry to scale and achieve network effects, whereby wide adoption of a particular software product may result in self-perpetuating growth in sales.
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Food Retailers & Distributors
The Food Retailers & Distributors industry consists of entities engaged in wholesale and retail sales of food, beverage and agricultural products. Store formats include retail supermarkets, convenience stores, warehouse supermarkets, liquor stores, bakeries, natural food stores, specialty food stores, seafood stores and distribution centres. Entities may specialise in one type of store format or have facilities that contain many formats. Products typically are sourced worldwide and include fresh meat and produce, prepared foods, processed foods, baked goods, frozen and canned foods, non-alcoholic and alcoholic beverages, and a wide selection of household goods and personal care products. Food retailers also may produce or sell private-label products.
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Relevant Issues for both Industries (13 of 26)

Why are some issues greyed out?

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

Environment
- GHG Emissions
  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).
- Air Quality
- Energy Management
  The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
- Water & Wastewater Management
- 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.
- Ecological Impacts
Social Capital
- Human Rights & Community Relations
- 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 Security
  The category addresses management of risks related to collection, retention, and use of sensitive, confidential, and/or proprietary customer or user data. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed. It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data.
- Access & Affordability
- Product Quality & Safety
  The category addresses issues involving unintended characteristics of products sold or services provided that may create health or safety risks to end-users. It addresses a company’s ability to offer manufactured products and/or services that meet customer expectations with respect to their health and safety characteristics. It includes, but is not limited to, issues involving liability, management of recalls and market withdrawals, product testing, and chemicals/content/ingredient management in products.
- Customer Welfare
  The category addresses customer welfare concerns over issues including, but not limited to, health and nutrition of foods and beverages, antibiotic use in animal production, and management of controlled substances. The category addresses the company’s ability to provide consumers with manufactured products and services that are aligned with societal expectations. It does not include issues directly related to quality and safety malfunctions of manufactured products and services, but instead addresses qualities inherent to the design and delivery of products and services where customer welfare may be in question. The scope of the category also captures companies’ ability to prevent counterfeit products.
- 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.
Human Capital
- 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.
- Employee Health & Safety
- 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.
Business Model and Innovation
- Product Design & Lifecycle Management
- Business Model Resilience
- Supply Chain Management
  The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
- Materials Sourcing & Efficiency
- Physical Impacts of Climate Change
Leadership and Governance
- Business Ethics
- 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).
- Management of the Legal & Regulatory Environment
- Critical Incident Risk Management
- Systemic Risk Management
  The category addresses the company’s contributions to or management of systemic risks resulting from large-scale weakening or collapse of systems upon which the economy and society depend. This includes financial systems, natural resource systems, and technological systems. It addresses the mechanisms a company has in place to reduce its contributions to systemic risks and to improve safeguards that may mitigate the impacts of systemic failure. For financial institutions, the category also captures the company’s ability to absorb shocks arising from financial and economic stress and meet stricter regulatory requirements related to the complexity and interconnectedness of companies in the industry.

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.

Software & IT Services 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
- 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.
  - Environmental Footprint of Hardware Infrastructure
    With the growth of cloud-based service offerings, entities in this industry own, operate or rent increasingly more data centres and other hardware. Thus, managing the energy and water use associated with IT hardware infrastructure is relevant to value creation. Data centres must be powered continuously, and disruptions to the energy supply can have a material effect on operations, depending on the magnitude and timing of the disruption. Entities face a trade-off between energy and water consumption because of data centre cooling needs. Cooling data centres with water instead of chillers improves energy efficiency, but this method may create dependence on significant local water resources. Data centre specification decisions are important for managing costs, obtaining a reliable supply of energy and water, and reducing reputational risks, particularly with the increasing global regulatory focus on climate change and the opportunities arising from energy efficiency and renewable energy innovations.
- 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
- 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 & Freedom of Expression
    As Software & IT Services entities increasingly deliver products and services over the Internet and through mobile devices, they must carefully manage two separate and often conflicting priorities. First, entities use customer data to innovate and provide customers with new products and services to generate revenues. Second, entities have access to a wide range of customer data, such as personal, demographic, content and behavioural data creating associated privacy concerns. This dynamic may result in increased regulatory scrutiny in many countries. The delivery of cloud-based software and IT services also raises concerns about potential access to user data by governments that may use it to limit the citizens’ freedoms. Effective management in this area may reduce regulatory and reputational risks that may result in decreased revenues, reduced market share and increased regulatory actions involving potential fines and other legal costs.
- Data Security
  The category addresses management of risks related to collection, retention, and use of sensitive, confidential, and/or proprietary customer or user data. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed. It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data.
  - Data Security
    Software & IT Services entities are targets of growing data security threats from cyberattacks, which puts their own data and their customers’ data at risk. Inadequate prevention, detection and remediation of data security threats may influence customer acquisition and retention and result in decreased market share and reduced demand for the entity’s products. In addition to reputational damage and increased customer turnover, data breaches also may result in increased expenses, commonly associated with remediation efforts such as identity protection offerings and employee training on data protection. Meanwhile, new and emerging data security standards and regulations may affect operating expenses through increased compliance costs. Additionally, entities in this industry may be well-positioned to capture revenue opportunities by providing secure software and services to meet the demand for ensuring data is kept secure.
- Product Quality & Safety
  The category addresses issues involving unintended characteristics of products sold or services provided that may create health or safety risks to end-users. It addresses a company’s ability to offer manufactured products and/or services that meet customer expectations with respect to their health and safety characteristics. It includes, but is not limited to, issues involving liability, management of recalls and market withdrawals, product testing, and chemicals/content/ingredient management in products.
  
  None
- Customer Welfare
  The category addresses customer welfare concerns over issues including, but not limited to, health and nutrition of foods and beverages, antibiotic use in animal production, and management of controlled substances. The category addresses the company’s ability to provide consumers with manufactured products and services that are aligned with societal expectations. It does not include issues directly related to quality and safety malfunctions of manufactured products and services, but instead addresses qualities inherent to the design and delivery of products and services where customer welfare may be in question. The scope of the category also captures companies’ ability to prevent counterfeit products.
  
  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.
  
  None
- 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.
  
  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.
  - Recruiting & Managing a Global, Diverse & Skilled Workforce
    Employees are important contributors to value creation in the Software & IT Services industry. Entities commonly find recruiting qualified employees to fill these positions difficult. A shortage in technically skilled employees can create intense competition to acquire highly skilled employees globally, contributing to high employee turnover rates. Some entities contribute to relevant education and training programmes to expand the availability of domestic, skilled employees. Entities offer significant monetary and non-monetary benefits to improve employee engagement and therefore retention and productivity. Initiatives to improve employee engagement and work-life balance may influence the recruitment and retention of a diverse workforce. Since the industry is characterised by relatively low representation from women and minority groups, efforts to recruit and develop globally diverse talent pools may address the talent shortage and improve the value of entity offerings. Greater workforce diversity is important for innovation and helps entities understand the needs of a diverse and global customer base.
- Supply Chain Management
  The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
  
  None
- 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
    Entities in the Software & IT Services industry spend a significant proportion of their revenues on IP protection, including acquiring patents and copyrights. Although IP protection is inherent to some entity business models and is an important driver of innovation, entities’ IP practices sometimes may be a contentious societal issue. Entities sometimes acquire patents and other IP protection to restrict competition and innovation, particularly if they are dominant market players. Because of software complexity, its abstract nature and increasing IP rights protection related to software, entities in the industry must navigate overlapping patent claims to operate. As a result, entities in the industry may find themselves constantly in litigation or subject to regulatory scrutiny either because of allegations of patent violations if they engage in unethical business practices, or are perceived as doing so, or because they engage in IP infringement litigation. Adverse legal or regulatory rulings related to antitrust and IP may expose entities in the industry to costly and lengthy litigations and potential monetary losses as a result. Such rulings also may affect an entity’s market share and pricing power if its patents or dominant position in important markets are challenged legally, with potentially significant effects on revenue. Therefore, entities that balance the protection of their IP and its use to spur innovation while ensuring their IP management and other business practices do not unfairly restrict competition, may reduce regulatory scrutiny and legal actions while protecting their market value.
- Systemic Risk Management
  The category addresses the company’s contributions to or management of systemic risks resulting from large-scale weakening or collapse of systems upon which the economy and society depend. This includes financial systems, natural resource systems, and technological systems. It addresses the mechanisms a company has in place to reduce its contributions to systemic risks and to improve safeguards that may mitigate the impacts of systemic failure. For financial institutions, the category also captures the company’s ability to absorb shocks arising from financial and economic stress and meet stricter regulatory requirements related to the complexity and interconnectedness of companies in the industry.
  - Managing Systemic Risks from Technology Disruptions
    With trends towards increased cloud computing and Software as a Service (SaaS), software and IT service providers must ensure they have robust infrastructure and policies in place to minimise disruptions to their services. Disruptions such as programming errors or server downtime may generate systemic risks, because computing and data storage functions move from individual entity servers in various industries to data centres of cloud-computing service providers. The risks are increased particularly if the affected customers are in sensitive sectors, such as financial institutions or utilities, which are considered critical national infrastructure. Entities’ investments in improving the reliability and quality of their IT infrastructure and services may attract and retain customers, thereby creating revenue and opportunities in new markets.
Food Retailers & Distributors 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).
  - Fleet Fuel Management
    Entities in the Food Retailers & Distributors industry own and operate vehicle fleets to deliver products between its distribution and retail locations. The fuel consumption of vehicle fleets is a significant industry expense, both in terms of operating costs and associated capital expenditures. Fossil fuel consumption can contribute to environmental impacts, including climate change and pollution. These environmental impacts may affect food retailers and distributors through regulatory exposure. Efficiencies gained in fuel use can reduce costs, mitigate exposure to fossil fuel price volatility and limit the carbon footprint associated with storage and transportation. Short-term capital expenditures in fuel-efficient fleets and more energy efficient technologies may be outweighed by long-term operational savings and decreased exposure to regulatory risks.
  - Air Emissions from Refrigeration
    Emissions of refrigeration chemicals from equipment used to store and display perishable foods pose unique regulatory risks for the Food Retailers & Distributors industry. International regulations on hydrochlorofluorocarbons (HCFCs) aim to mitigate damage by HCFCs to the earth’s ozone layer. Additionally, many common HCFCs and hydrofluorocarbons (HFCs) are highly potent greenhouse gases (GHGs), which increases the industry’s exposure to climate change-related regulations. Regulators can assess penalties on entities that violate emissions standards. Entities may be required to upgrade or replace equipment, making capital expenditures to reduce emissions or replace existing refrigerants with potentially costlier but less environmentally-damaging alternatives.
- 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
    Food retail and distribution facilities are typically more energy-intensive than other types of commercial spaces. These facilities use energy predominately for refrigeration, heating, ventilation and air conditioning (HVAC), as well as lighting. Entities in the industry generally purchase the majority of consumed electricity, while some are beginning to generate energy on-site or add renewable energy into their energy mix. Energy production and consumption contribute to environmental impacts, including climate change and pollution, which have the potential to indirectly, yet materially, impact the operations of food retailers and distributors. Entities that manage to increase energy efficiency and use alternative energy sources may increase profitability by reducing expenses and decreasing risk.
- 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.
  - Food Waste Management
    The Food Retailers & Distributors industry generates food waste at various stages of operation. Food waste includes edible or otherwise useful food that does not reach consumers, as well as foods that spoil or are damaged during transportation or stocking or while sitting on store shelves. For entities, food waste represents losses of both saleable merchandise and resources used in food production, including land, water, labour, energy and agricultural chemicals. Food waste also contributes to food insecurity and can generate greenhouse gas (GHG) emissions during landfill decomposition. Effective food waste management can present financial opportunities to reduce costs associated with inventory loss, as well as help improve food security by more efficiently diverting food resources for beneficial purposes.
- 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
- Data Security
  The category addresses management of risks related to collection, retention, and use of sensitive, confidential, and/or proprietary customer or user data. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed. It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data.
  - Data Security
    Through electronic payment transactions, food retailers establish a relationship of trust with consumers who share their personal financial data with them. Data breaches can occur through breaches of the physical payment technology, called point-of-sale breaches, as well as through attacks on cybersecurity infrastructure. Data breaches that result in the theft or loss of customers’ personal data undermine trust in an entity’s ability to securely manage confidential information. This loss of confidence could result in reduced number of customer visits, lower revenues and diminished brand value. Retailers with strong technological and managerial systems to avoid data breaches and respond to threats effectively can position themselves favourably with customers and reduce the risk of litigation and other costs.
- Product Quality & Safety
  The category addresses issues involving unintended characteristics of products sold or services provided that may create health or safety risks to end-users. It addresses a company’s ability to offer manufactured products and/or services that meet customer expectations with respect to their health and safety characteristics. It includes, but is not limited to, issues involving liability, management of recalls and market withdrawals, product testing, and chemicals/content/ingredient management in products.
  - Food Safety
    Maintaining product quality and safety is crucial for the Food Retailers & Distributors industry, since contamination by pathogens, hazardous substances or spoilage can present risks to human health. Contamination can occur at any stage in the food value chain, including food production, processing, transportation, distribution and retail. Although entities may not be directly responsible for all food safety and recall incidents, they are involved in the process and still may experience consequences associated with incidents, such as financial ramifications, damage to brand value, lower revenues and increased costs. Measures to prevent spoilage and contamination include temperature control, frequent food inspection and careful supplier selection.
- Customer Welfare
  The category addresses customer welfare concerns over issues including, but not limited to, health and nutrition of foods and beverages, antibiotic use in animal production, and management of controlled substances. The category addresses the company’s ability to provide consumers with manufactured products and services that are aligned with societal expectations. It does not include issues directly related to quality and safety malfunctions of manufactured products and services, but instead addresses qualities inherent to the design and delivery of products and services where customer welfare may be in question. The scope of the category also captures companies’ ability to prevent counterfeit products.
  - Product Health & Nutrition
    Consumer awareness of food content and nutritional value and their relationship to health, shapes the industry’s competitive landscape. Demand for food products that are made with natural ingredients, certified to be organic, low-fat or low-sugar, or produced without genetically modified organisms (GMOs) can create opportunities for entities. Although the links between consumer health and some foods are not well-established, consumers have nonetheless shown preferences for food categories that are perceived to be healthier than others. Food retailers that recognise the risks and opportunities presented by consumers’ shifting preferences and adapt to consumer demands may be better positioned to capture opportunities for increasing revenue and market share.
- 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.
  - Product Labelling & Marketing
    Communication with consumers through product labelling and marketing is an important facet of food retail. The accuracy and depth of information presented in food labelling is important to shoppers and regulators. Labelling is especially relevant for the sale of private-label products manufactured for food retailers, with direct consequences on brand reputation. To inform purchasing decisions, consumers may seek additional information about product ingredients, such as the presence of genetically modified organism (GMO) content or other ingredients considered healthy or nutritious. These issues can affect competition among entities in the industry, since entities may be subject to litigation or criticism resulting from making misleading statements or failing to adapt to consumer demand for increased labelling transparency. These factors can have consequences on retailers’ brand value and revenue growth. Regulations addressing the accurate labelling of products and their ingredients present an additional risk of penalties or litigation for entities.
- 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 Practices
    The Food Retailers & Distributors industry employs many hourly workers. Low average wages in the industry, which help entities maintain low prices for products, may result in labour-related risks. Worker dissatisfaction with wages and benefits, combined with high unionisation rates, can result in strikes which can in turn lead to business disruption and reputational damage. Additionally, entities that are involved in gender and racial discrimination cases can experience costly financial settlements. Entities may benefit from taking a long-term perspective on managing workers, including their pay and benefits, in a way that protects the rights of workers and enhances their productivity and strengthens the entity’s reputation and brand value.
- 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
- Supply Chain Management
  The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
  - Management of Environmental & Social Impacts in the Supply Chain
    Food retailers and distributors source merchandise from a wide range of manufacturers. These suppliers face a myriad of sustainability-related challenges that include resource conservation, water scarcity, animal welfare, fair labour practices and climate change. When poorly managed, these issues can affect the price and availability of food. Additionally, consumers increasingly are concerned with the production methods, origins and externalities associated with the foods they purchase, which may affect an entity’s reputation. Food retailers and distributors also can work with suppliers on packaging design to generate cost savings in transport, improve brand reputation and reduce environmental impact. Entities that can manage effectively product supply risks by assessing and engaging with suppliers, implementing sustainable sourcing guidelines and enhancing supply chain transparency positioned more advantageously to improve supply chain resiliency, mitigate reputational risks, and potentially increase consumer demand or capture new market opportunities.
- 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
- Systemic Risk Management
  The category addresses the company’s contributions to or management of systemic risks resulting from large-scale weakening or collapse of systems upon which the economy and society depend. This includes financial systems, natural resource systems, and technological systems. It addresses the mechanisms a company has in place to reduce its contributions to systemic risks and to improve safeguards that may mitigate the impacts of systemic failure. For financial institutions, the category also captures the company’s ability to absorb shocks arising from financial and economic stress and meet stricter regulatory requirements related to the complexity and interconnectedness of companies in the industry.
  
  None

General Issue Category

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GHG Emissions

Fleet Fuel Management
Entities in the Food Retailers & Distributors industry own and operate vehicle fleets to deliver products between its distribution and retail locations. The fuel consumption of vehicle fleets is a significant industry expense, both in terms of operating costs and associated capital expenditures. Fossil fuel consumption can contribute to environmental impacts, including climate change and pollution. These environmental impacts may affect food retailers and distributors through regulatory exposure. Efficiencies gained in fuel use can reduce costs, mitigate exposure to fossil fuel price volatility and limit the carbon footprint associated with storage and transportation. Short-term capital expenditures in fuel-efficient fleets and more energy efficient technologies may be outweighed by long-term operational savings and decreased exposure to regulatory risks.
Air Emissions from Refrigeration
Emissions of refrigeration chemicals from equipment used to store and display perishable foods pose unique regulatory risks for the Food Retailers & Distributors industry. International regulations on hydrochlorofluorocarbons (HCFCs) aim to mitigate damage by HCFCs to the earth’s ozone layer. Additionally, many common HCFCs and hydrofluorocarbons (HFCs) are highly potent greenhouse gases (GHGs), which increases the industry’s exposure to climate change-related regulations. Regulators can assess penalties on entities that violate emissions standards. Entities may be required to upgrade or replace equipment, making capital expenditures to reduce emissions or replace existing refrigerants with potentially costlier but less environmentally-damaging alternatives.

Energy Management

Environmental Footprint of Hardware Infrastructure
With the growth of cloud-based service offerings, entities in this industry own, operate or rent increasingly more data centres and other hardware. Thus, managing the energy and water use associated with IT hardware infrastructure is relevant to value creation. Data centres must be powered continuously, and disruptions to the energy supply can have a material effect on operations, depending on the magnitude and timing of the disruption. Entities face a trade-off between energy and water consumption because of data centre cooling needs. Cooling data centres with water instead of chillers improves energy efficiency, but this method may create dependence on significant local water resources. Data centre specification decisions are important for managing costs, obtaining a reliable supply of energy and water, and reducing reputational risks, particularly with the increasing global regulatory focus on climate change and the opportunities arising from energy efficiency and renewable energy innovations.

Energy Management
Food retail and distribution facilities are typically more energy-intensive than other types of commercial spaces. These facilities use energy predominately for refrigeration, heating, ventilation and air conditioning (HVAC), as well as lighting. Entities in the industry generally purchase the majority of consumed electricity, while some are beginning to generate energy on-site or add renewable energy into their energy mix. Energy production and consumption contribute to environmental impacts, including climate change and pollution, which have the potential to indirectly, yet materially, impact the operations of food retailers and distributors. Entities that manage to increase energy efficiency and use alternative energy sources may increase profitability by reducing expenses and decreasing risk.

Waste & Hazardous Materials Management

Food Waste Management
The Food Retailers & Distributors industry generates food waste at various stages of operation. Food waste includes edible or otherwise useful food that does not reach consumers, as well as foods that spoil or are damaged during transportation or stocking or while sitting on store shelves. For entities, food waste represents losses of both saleable merchandise and resources used in food production, including land, water, labour, energy and agricultural chemicals. Food waste also contributes to food insecurity and can generate greenhouse gas (GHG) emissions during landfill decomposition. Effective food waste management can present financial opportunities to reduce costs associated with inventory loss, as well as help improve food security by more efficiently diverting food resources for beneficial purposes.

Customer Privacy

Data Privacy & Freedom of Expression
As Software & IT Services entities increasingly deliver products and services over the Internet and through mobile devices, they must carefully manage two separate and often conflicting priorities. First, entities use customer data to innovate and provide customers with new products and services to generate revenues. Second, entities have access to a wide range of customer data, such as personal, demographic, content and behavioural data creating associated privacy concerns. This dynamic may result in increased regulatory scrutiny in many countries. The delivery of cloud-based software and IT services also raises concerns about potential access to user data by governments that may use it to limit the citizens’ freedoms. Effective management in this area may reduce regulatory and reputational risks that may result in decreased revenues, reduced market share and increased regulatory actions involving potential fines and other legal costs.

Data Security

Data Security
Software & IT Services entities are targets of growing data security threats from cyberattacks, which puts their own data and their customers’ data at risk. Inadequate prevention, detection and remediation of data security threats may influence customer acquisition and retention and result in decreased market share and reduced demand for the entity’s products. In addition to reputational damage and increased customer turnover, data breaches also may result in increased expenses, commonly associated with remediation efforts such as identity protection offerings and employee training on data protection. Meanwhile, new and emerging data security standards and regulations may affect operating expenses through increased compliance costs. Additionally, entities in this industry may be well-positioned to capture revenue opportunities by providing secure software and services to meet the demand for ensuring data is kept secure.

Data Security
Through electronic payment transactions, food retailers establish a relationship of trust with consumers who share their personal financial data with them. Data breaches can occur through breaches of the physical payment technology, called point-of-sale breaches, as well as through attacks on cybersecurity infrastructure. Data breaches that result in the theft or loss of customers’ personal data undermine trust in an entity’s ability to securely manage confidential information. This loss of confidence could result in reduced number of customer visits, lower revenues and diminished brand value. Retailers with strong technological and managerial systems to avoid data breaches and respond to threats effectively can position themselves favourably with customers and reduce the risk of litigation and other costs.

Product Quality & Safety

Food Safety
Maintaining product quality and safety is crucial for the Food Retailers & Distributors industry, since contamination by pathogens, hazardous substances or spoilage can present risks to human health. Contamination can occur at any stage in the food value chain, including food production, processing, transportation, distribution and retail. Although entities may not be directly responsible for all food safety and recall incidents, they are involved in the process and still may experience consequences associated with incidents, such as financial ramifications, damage to brand value, lower revenues and increased costs. Measures to prevent spoilage and contamination include temperature control, frequent food inspection and careful supplier selection.

Customer Welfare

Product Health & Nutrition
Consumer awareness of food content and nutritional value and their relationship to health, shapes the industry’s competitive landscape. Demand for food products that are made with natural ingredients, certified to be organic, low-fat or low-sugar, or produced without genetically modified organisms (GMOs) can create opportunities for entities. Although the links between consumer health and some foods are not well-established, consumers have nonetheless shown preferences for food categories that are perceived to be healthier than others. Food retailers that recognise the risks and opportunities presented by consumers’ shifting preferences and adapt to consumer demands may be better positioned to capture opportunities for increasing revenue and market share.

Selling Practices & Product Labeling

Product Labelling & Marketing
Communication with consumers through product labelling and marketing is an important facet of food retail. The accuracy and depth of information presented in food labelling is important to shoppers and regulators. Labelling is especially relevant for the sale of private-label products manufactured for food retailers, with direct consequences on brand reputation. To inform purchasing decisions, consumers may seek additional information about product ingredients, such as the presence of genetically modified organism (GMO) content or other ingredients considered healthy or nutritious. These issues can affect competition among entities in the industry, since entities may be subject to litigation or criticism resulting from making misleading statements or failing to adapt to consumer demand for increased labelling transparency. These factors can have consequences on retailers’ brand value and revenue growth. Regulations addressing the accurate labelling of products and their ingredients present an additional risk of penalties or litigation for entities.

Labour Practices

Labour Practices
The Food Retailers & Distributors industry employs many hourly workers. Low average wages in the industry, which help entities maintain low prices for products, may result in labour-related risks. Worker dissatisfaction with wages and benefits, combined with high unionisation rates, can result in strikes which can in turn lead to business disruption and reputational damage. Additionally, entities that are involved in gender and racial discrimination cases can experience costly financial settlements. Entities may benefit from taking a long-term perspective on managing workers, including their pay and benefits, in a way that protects the rights of workers and enhances their productivity and strengthens the entity’s reputation and brand value.

Employee Engagement, Diversity & Inclusion

Recruiting & Managing a Global, Diverse & Skilled Workforce
Employees are important contributors to value creation in the Software & IT Services industry. Entities commonly find recruiting qualified employees to fill these positions difficult. A shortage in technically skilled employees can create intense competition to acquire highly skilled employees globally, contributing to high employee turnover rates. Some entities contribute to relevant education and training programmes to expand the availability of domestic, skilled employees. Entities offer significant monetary and non-monetary benefits to improve employee engagement and therefore retention and productivity. Initiatives to improve employee engagement and work-life balance may influence the recruitment and retention of a diverse workforce. Since the industry is characterised by relatively low representation from women and minority groups, efforts to recruit and develop globally diverse talent pools may address the talent shortage and improve the value of entity offerings. Greater workforce diversity is important for innovation and helps entities understand the needs of a diverse and global customer base.

Supply Chain Management

Management of Environmental & Social Impacts in the Supply Chain
Food retailers and distributors source merchandise from a wide range of manufacturers. These suppliers face a myriad of sustainability-related challenges that include resource conservation, water scarcity, animal welfare, fair labour practices and climate change. When poorly managed, these issues can affect the price and availability of food. Additionally, consumers increasingly are concerned with the production methods, origins and externalities associated with the foods they purchase, which may affect an entity’s reputation. Food retailers and distributors also can work with suppliers on packaging design to generate cost savings in transport, improve brand reputation and reduce environmental impact. Entities that can manage effectively product supply risks by assessing and engaging with suppliers, implementing sustainable sourcing guidelines and enhancing supply chain transparency positioned more advantageously to improve supply chain resiliency, mitigate reputational risks, and potentially increase consumer demand or capture new market opportunities.

Competitive Behaviour

Intellectual Property Protection & Competitive Behaviour
Entities in the Software & IT Services industry spend a significant proportion of their revenues on IP protection, including acquiring patents and copyrights. Although IP protection is inherent to some entity business models and is an important driver of innovation, entities’ IP practices sometimes may be a contentious societal issue. Entities sometimes acquire patents and other IP protection to restrict competition and innovation, particularly if they are dominant market players. Because of software complexity, its abstract nature and increasing IP rights protection related to software, entities in the industry must navigate overlapping patent claims to operate. As a result, entities in the industry may find themselves constantly in litigation or subject to regulatory scrutiny either because of allegations of patent violations if they engage in unethical business practices, or are perceived as doing so, or because they engage in IP infringement litigation. Adverse legal or regulatory rulings related to antitrust and IP may expose entities in the industry to costly and lengthy litigations and potential monetary losses as a result. Such rulings also may affect an entity’s market share and pricing power if its patents or dominant position in important markets are challenged legally, with potentially significant effects on revenue. Therefore, entities that balance the protection of their IP and its use to spur innovation while ensuring their IP management and other business practices do not unfairly restrict competition, may reduce regulatory scrutiny and legal actions while protecting their market value.

Systemic Risk Management

Managing Systemic Risks from Technology Disruptions
With trends towards increased cloud computing and Software as a Service (SaaS), software and IT service providers must ensure they have robust infrastructure and policies in place to minimise disruptions to their services. Disruptions such as programming errors or server downtime may generate systemic risks, because computing and data storage functions move from individual entity servers in various industries to data centres of cloud-computing service providers. The risks are increased particularly if the affected customers are in sensitive sectors, such as financial institutions or utilities, which are considered critical national infrastructure. Entities’ investments in improving the reliability and quality of their IT infrastructure and services may attract and retain customers, thereby creating revenue and opportunities in new markets.

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