Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • 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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  • Restaurants Entities in the Restaurants industry prepare meals, snacks and beverages to customers’ orders for immediate on- and off-premises consumption. Broadly divided into three sub-categories, the restaurant industry includes limited-service eating places, casual full-service eating places and upscale full-service eating places. Limited-service restaurants provide services to customers who order and pay before eating. Fast-food restaurants represent the largest share of the limited-service restaurants segment. Full-service restaurants offer more service, food for consumption primarily on-premises, and typically reflect higher quality food and prices.
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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.
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • 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.
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
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    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
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    • 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.
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    • 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.
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    • Labour Practices The category addresses the company’s ability to uphold commonly accepted labour standards in the workplace, including compliance with labour laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labour, forced or bonded labour, exploitative labour, fair wages and overtime pay, and other basic workers’ rights. It also includes minimum wage policies and provision of benefits, which may influence how a workforce is attracted, retained, and motivated. The category further addresses a company’s relationship with organized labour and freedom of association.
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    • Employee 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.
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    • 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.
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management Restaurant operations have high energy intensity compared with other commercial building operations. Commercial kitchen appliances are energy intensive, and dining areas typically are temperature-controlled for customers. Fossil fuel-based energy production and consumption contribute to significant environmental impacts, including climate change and air pollution, which have the potential indirectly, yet materially, to affect restaurant operations. Regulations on greenhouse gas (GHG) emissions pricing or regulatory incentives for energy efficiency improvements and renewable energy affect conventional and renewable energy prices. Entities that manage energy consumption at entity-owned and franchise locations can decrease operational costs through energy efficiency upgrades and limit exposure to GHG emissions regulations by using renewable energy resources.
    • 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 used in restaurant operations, from cooking and dishwashing to cleaning. The restaurant type, size and equipment all affect water use. Restaurants located in water-stressed regions may be exposed to water usage restrictions or face high water costs. Long-term historical increases in the costs of water, and expectations around continued increases because of overconsumption and constrained supplies resulting from population growth, pollution and climate change, indicate the increasing importance of effective water management. Entities can reduce water use and associated operational costs by implementing water-efficient practices and using water-efficient commercial kitchen equipment.
    • 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 & Packaging Waste Management Restaurants produce waste in two main forms: food and packaging. The food preparation process as well as food unconsumed generate food waste. Food waste results in resource loss such as water, energy, land, labour and capital, and produces GHG emissions because of decomposition. Moreover, food ingredient deliveries to restaurants are a significant source of packaging waste. Packaging waste includes packaging received from suppliers and packaging discarded by consumers. In addition, limited-service restaurants make heavy use of disposable tableware to serve customers. Applicable jurisdictional laws or regulations around packaging may continue evolving to reduce packaging or improve recyclability or biodegradability of packaging. Entities that can anticipate new regulations may witness not only a positive effect on brand reputation, but they also may reduce their compliance costs. Entities can reduce waste handling costs and improve operational efficiency by reducing waste through various methods, including food recovery, diverting waste from landfills and packaging reclamation programmes.
    • 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.
      None
    • 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 Both food preparation methods and the quality of ingredients can impact food safety in the Restaurants industry. Restaurant food safety is especially challenging to manage with a broad supply chain. The global nature of the industry as well as the franchising model make ensuring the safety of food supplies difficult for restaurant entities. Failure to monitor the quality of supplied products may increase an entity’s risk of supply disruptions as well as negative publicity. Food safety issues, such as foodborne illness concerns, in either entity-owned or franchise-operated locations can affect a restaurant’s reputation. Reputational damage from food safety issues tends to have long-term consequences. Entities that adhere to industry standards for food preparation and safety may protect shareholder value better.
    • 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.
      • Nutritional Content Public health concerns around obesity have focused on the Restaurants industry. Restaurants are increasingly encouraged to improve the nutritional content of menu offerings and to increase transparency around the content of menu offerings, such as publishing calorie counts. Demand in the Restaurants industry is increasingly driven by consumer preferences for choices that are more healthful. Entities that can offer more nutritious menu options may capture new markets for health-conscious consumers and improve consumer market share. A higher share of nutritious options may have a beneficial effect on an entity’s reputation and revenue growth in the long term.
    • 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 Restaurants industry is labour-intensive, and many of the staff are hourly, part-time or seasonal workers. The industry is among the top job creators and is an entry point for young and migrant workers to join the workforce. Restaurant employees in franchised or licensed locations may be employed by a third party. In addition, because many restaurant chains exist across continents, ensuring consistent labour standards can be a challenge for restaurant employees in both entity-owned and franchise locations. Labour issues at franchises affect brand image because customers cannot make a distinction between entity-owned and franchised restaurants. Restaurants that can effectively manage human capital by offering competitive wages, safe working environments and other opportunities for professional growth may improve employee morale while reducing turnover rates and the associated administrative costs involved in employee acquisition and training.
    • 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.
      • Supply Chain Management & Food Sourcing Restaurants source ingredients and products from a wide range of suppliers. Supply chain management is crucial for restaurants to ensure food safety, to protect their reputations and increase revenue. Sourcing quality ingredients to maintain a consistent level of quality across different locations can be operationally challenging and exacerbated by the global nature of the industry. Demand from the food and beverage industry, including restaurants, drives and shapes agricultural production, indicating that actions by industry players have a larger impact on society. Therefore, sustainable and ethical sourcing by industry entities may be necessary to ensure future supply and to minimise lifecycle impacts of entity operations. Sourcing from suppliers that have high quality standards, employ environmentally sustainable farming methods, and honour labour rights may better create value over the long-term. By increasing the amount of food supply sourced in conformance with environmental and social standards, as well as conformance with animal welfare standards and best practices, restaurant operators may be able to maintain food quality, manage food safety issues, enhance their reputation and expand their market share.
    • 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.
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