Industry Comparison

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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  • Water Utilities & Services Water Utilities & Services industry entities own and operate water supply and wastewater treatment systems (generally structured as regulated utility businesses) or provide operational and other specialised water services to system owners (usually market-based operations). Water supply systems include the sourcing, treatment and distribution of water to residences, businesses and other entities such as governments. Wastewater systems collect and treat wastewater, including sewage, greywater, industrial waste fluids and stormwater runoff, before discharging the resulting effluent back into the environment.
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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.
  • Software & IT Services Remove
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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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    • 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.
    • Access & Affordability The category addresses a company’s ability to ensure broad access to its products and services, specifically in the context of underserved markets and/or population groups. It includes the management of issues related to universal needs, such as the accessibility and affordability of health care, financial services, utilities, education, and telecommunications.
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    • 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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    • 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.
    • Business Model Resilience The category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
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    • Materials Sourcing & Efficiency The category addresses issues related to the resilience of materials supply chains to impacts of climate change and other external environmental and social factors. It captures the impacts of such external factors on operational activity of suppliers, which can further affect availability and pricing of key resources. It addresses a company’s ability to manage these risks through product design, manufacturing, and end-of-life management, such as by using of recycled and renewable materials, reducing the use of key materials (dematerialization), maximizing resource efficiency in manufacturing, and making R&D investments in substitute materials. Additionally, companies can manage these issues by screening, selection, monitoring, and engagement with suppliers to ensure their resilience to external risks. It does not address issues associated with environmental and social externalities created by operational activity of individual suppliers, which is covered in a separate category.
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    • Physical Impacts of Climate Change The category addresses the company’s ability to manage risks and opportunities associated with direct exposure of its owned or controlled assets and operations to actual or potential physical impacts of climate change. It captures environmental and social issues that may arise from operational disruptions due to physical impacts of climate change. It further captures socio-economic issues resulting from companies failing to incorporate climate change consideration in products and services sold, such as insurance policies and mortgages. The category relates to the company’s ability to adapt to increased frequency and severity of extreme weather, shifting climate, sea level risk, and other expected physical impacts of climate change. Management may involve enhancing resiliency of physical assets and/or surrounding infrastructure as well as incorporation of climate change-related considerations into key business activities (e.g., mortgage and insurance underwriting, planning and development of real estate projects).
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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.
  • Water Utilities & Services Remove
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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 Entities in the Water Utilities & Services industry consume significant amounts of energy for the withdrawal, conveyance, treatment, and distribution or discharge of potable water and wastewater. Typically, an entity’s largest operating cost after purchased water, chemicals, labour and utility operating costs is energy use. Purchased grid electricity is the most common energy input. In more remote locations, entities may use on-site generation to power equipment. The inefficient use of purchased grid electricity creates environmental externalities, such as increased Scope 2 greenhouse gas emissions. Environmental regulations may affect the future grid energy mix, resulting in price increases. Additionally, climate change is expected to impact grid reliability and affect the availability of water resources. As a result, water utility energy intensity may increase in the future as water resource access becomes more difficult. Alternative water treatment, such as recycling and desalination, also can require more energy. Together with decisions about the use of alternative fuels, renewable energy and on-site electricity generation, energy efficiency can influence both the cost and the reliability of the energy supply.
    • 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.
      • Distribution Network Efficiency Water utilities develop, maintain and operate complex interconnected infrastructure networks that include extensive pipelines, canals, reservoirs and pump stations. Distribution networks may lose significant volumes of water (called ‘non-revenue water’ because it is a distributed volume of water not reflected in customer billings). This water is lost primarily because of infrastructure failures and inefficiencies, such as leaking pipes and service connections. Non-revenue real water losses may impact financial performance, raise customer rates, and squander water and other resources such as energy and treatment chemicals. Conversely, improvements to infrastructure and operating processes may limit non-revenue losses, increase revenue and reduce costs. Efficiently directing operational and maintenance expenses or capital expenditures to distribution systems including primarily pipeline and service connection repair, refurbishment, or replacement may improve entity value and provide strong investment returns.
      • Effluent Quality Management Water and wastewater treatment facilities produce effluent that may pose risks to the environment and human health. Effluent includes residuals and solids that consist of chemicals used in the treatment process and contaminants removed from raw water or wastewater inputs. Facilities discharge treated effluent into surface water or pump it into groundwater. Potential environmental impacts vary depending on the treatment and disposal process. Additionally, consumers and regulators are becoming increasingly concerned by substances that may not be treated by wastewater facilities, such as endocrine disrupting chemicals (EDCs). Because of the environmental risks associated with effluent, treatment facilities are subject to extensive environmental regulations to control and monitor their impact. As public and regulatory scrutiny of effluent quality increases with emerging concerns about some potentially harmful substances, entities may need to innovate to ensure effluent is not harmful to the environment or human health. Effluent discharges exceeding jurisdictional limits may result in significant regulatory penalties, and frequent or severe episodes may jeopardise a utility’s social licence to operate. Entities can avoid the financial consequences of poor effluent quality management through infrastructure and equipment planning, maintenance and operations, as well as the deployment of appropriately trained and experienced labour.
    • 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
    • Access & Affordability The category addresses a company’s ability to ensure broad access to its products and services, specifically in the context of underserved markets and/or population groups. It includes the management of issues related to universal needs, such as the accessibility and affordability of health care, financial services, utilities, education, and telecommunications.
      • Water Affordability & Access Reliable clean water access is considered a basic human right in most jurisdictions. Affordable pricing and sufficient access are essential components of this right. Thus, structuring water rates in a way that the community perceives to be fair is an important part of the operations and functions of entities in the Water Utilities & Services industry. Entities that collabourate with regulators to implement rate structures that are well-received by the communities they service may be better able to maintain financial stability and take advantage of opportunities for growth—especially because of the widespread underfunding of water infrastructure in many regions. Entities that use rate mechanisms that inhibit access to water through prohibitive costs or otherwise, may face community opposition. Entities should ensure fair pricing and access, as well as rates that can adequately fund infrastructure over the long term, provide safe drinking water and wastewater treatment, and receive appropriate returns on capital.
    • 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.
      • Drinking Water Quality Entities in the industry must ensure that drinking water conforms to health regulations, satisfies customer expectations and is supplied reliably. To protect human health, entities must protect water sources from contamination, which also may reduce treatment processes and costs for entities. Comprehensive treatment processes are designed, developed and maintained to meet water quality standards, and the finished water output is monitored routinely for compliance and safety. Natural disasters, such as forest fires and flooding, may also affect water quality. Overall, entities invest significant resources to deliver safe drinking water consistently to customers. Failure to ensure adequate water quality may result in regulatory fines, litigation, increased operating costs or capital expenditures, reputational risk, and asset or business seizure.
    • 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
    • Business Model Resilience The category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
      • End-Use Efficiency Consumer level water efficiency and conservation—whether a product of government mandates, environmental consciousness or demographic trends—is increasingly important for long-term resource availability and the financial performance of the water supply segment of the industry. How utilities work with regulators to mitigate revenue declines while increasing end-use resource efficiency may be financially material. Water efficiency mechanisms, including rate decoupling, may ensure that a utility’s revenue can adequately cover its fixed costs and provide the desired level of returns regardless of sales volume, while incentivising customers to conserve water. Efficiency mechanisms can align utilities’ economic incentives with environmental and social interests, including improved resource efficiency, lower rates and increased capital investments in infrastructure. Water utilities may manage rate mechanism impacts through positive regulatory relations, forward-looking rate cases that incorporate efficiency and a strong execution of efficiency strategy.
    • Materials Sourcing & Efficiency The category addresses issues related to the resilience of materials supply chains to impacts of climate change and other external environmental and social factors. It captures the impacts of such external factors on operational activity of suppliers, which can further affect availability and pricing of key resources. It addresses a company’s ability to manage these risks through product design, manufacturing, and end-of-life management, such as by using of recycled and renewable materials, reducing the use of key materials (dematerialization), maximizing resource efficiency in manufacturing, and making R&D investments in substitute materials. Additionally, companies can manage these issues by screening, selection, monitoring, and engagement with suppliers to ensure their resilience to external risks. It does not address issues associated with environmental and social externalities created by operational activity of individual suppliers, which is covered in a separate category.
      • Water Supply Resilience Water supply systems obtain water from groundwater and surface water sources. Water supplies either may be accessed directly or purchased from a third party, often a government entity. Water scarcity, water source contamination, infrastructure failures, regulatory restrictions, competing users and overconsumption by customers are all factors that may jeopardise sufficient water supply access. These issues, combined with an increasing risk of extreme and frequent drought conditions because of climate change, may result in inadequate supplies or mandated water restrictions. The related financial impacts may manifest in diverse ways, depending on rate structure, but are most likely to impact entity value through decreased revenue. Water supply challenges also may increase the price of purchased water, which could result in higher operating costs. Failures of critical infrastructure such as aqueducts and canals, which could result from events such as earthquakes, can present catastrophic risks to customers of the water supply system and could inflict untold financial consequences. Entities may mitigate water supply risks (and the resulting financial risks) through diversification of water supplies, sustainable withdrawal levels, technological and infrastructure improvements, contingency planning, positive relations with regulators and other major users, as well as rate structures.
    • Physical Impacts of Climate Change The category addresses the company’s ability to manage risks and opportunities associated with direct exposure of its owned or controlled assets and operations to actual or potential physical impacts of climate change. It captures environmental and social issues that may arise from operational disruptions due to physical impacts of climate change. It further captures socio-economic issues resulting from companies failing to incorporate climate change consideration in products and services sold, such as insurance policies and mortgages. The category relates to the company’s ability to adapt to increased frequency and severity of extreme weather, shifting climate, sea level risk, and other expected physical impacts of climate change. Management may involve enhancing resiliency of physical assets and/or surrounding infrastructure as well as incorporation of climate change-related considerations into key business activities (e.g., mortgage and insurance underwriting, planning and development of real estate projects).
      • Network Resiliency & Impacts of Climate Change Climate change may create uncertainty for water supply systems and wastewater systems because of potential impacts on infrastructure and operations. Climate change may result in increased water stress, more frequent severe weather events, reduced water quality and rising sea levels that could impair utility assets and operations. Water supply and wastewater disposal are basic services for which maintaining operational continuity is of utmost importance. The increasing frequency and severity of storms challenge water and wastewater treatment facilities, and these factors can affect service continuity. Intense precipitation may result in sewage volumes that exceed treatment facility capacity resulting in the release of untreated effluent. Minimising current and future risks of service disruptions and improving service quality may require additional capital expenditures and operational expenses. As the likelihood of extreme weather events increases, entities that address these risks through redundancies and strategic planning may better serve customers and improve performance.
    • 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

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