Industry Comparison
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Current language: English (2023)
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Telecommunication Services
Telecommunication Services industry entities provide a range of services from wireless and wireline telecommunications to cable and satellite services. The wireless services segment provides direct communication through radio-based cellular networks and operates and maintains the associated switching and transmission facilities. The wireline segment provides local and long-distance voice communication via the Public Switched Telephone Network. Wireline carriers also offer voice over internet protocol (VoIP) telephone, television and broadband internet services over an expanding network of fibre optic cables. Cable providers distribute television programming from cable networks to subscribers. They typically also provide consumers with video services, high-speed internet service and VoIP. Traditionally, these services are bundled into packages that charge subscribers a single payment. Satellite entities distribute TV programming through broadcasting satellites orbiting the earth or through ground stations. Entities serve customers primarily in their domestic markets, although some entities operate in more than one country. -
Engineering & Construction Services
The Engineering & Construction Services industry provides engineering, construction, design, consulting, contracting and other related services that support various building and infrastructure projects. The industry has four major segments: engineering services, infrastructure construction, non-residential building construction, and building subcontractors and construction-related professional services. The infrastructure construction segment includes entities that design or build infrastructure projects such as power plants, dams, oil and gas pipelines, refineries, highways, bridges, tunnels, railways, ports, airports, waste treatment plants, water networks and stadiums. The non-residential building construction segment includes entities that design or build industrial and commercial facilities such as factories, warehouses, data centres, offices, hotels, hospitals, universities and retail spaces such as shopping centres. The engineering services segment includes entities that provide specialised architectural and engineering services such as design and development of feasibility studies for many of the project types listed above. Finally, the building subcontractors and other construction-related professional services segment includes smaller entities that provide ancillary services such as carpentry, electrical, plumbing, painting, waterproofing, landscaping, interior design and building inspection. The industry’s customers include infrastructure owners and developers in the public and private sectors. Large entities in this industry operate and generate revenue globally and typically operate in more than one segment.
Relevant Issues for both Industries (11 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
- Air Quality
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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. - Water & Wastewater Management
- Waste & Hazardous Materials Management
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Ecological Impacts
The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.
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Social Capital
- Human Rights & Community Relations
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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 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
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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. - Customer Welfare
- Selling Practices & Product Labeling
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Human Capital
- Labour Practices
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Employee Health & Safety
The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment. - Employee Engagement, Diversity & Inclusion
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Business Model and Innovation
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Product Design & Lifecycle Management
The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories. - Business Model Resilience
- Supply Chain Management
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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. - Physical Impacts of Climate Change
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Leadership and Governance
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Business Ethics
The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error. -
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
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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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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.-
Access Standard
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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 Operations
Individual Telecommunication Services entities consume substantial amounts of energy. Depending on the source of energy and generation efficiency, electricity consumption by telecom network infrastructure can contribute significantly to environmental externalities, such as climate change, creating sustainability risks for the industry. Although network equipment and data centres are becoming more energy efficient, their overall energy consumption is increasing with the expansion in telecommunications infrastructure and data traffic. How Telecommunication Services entities manage their overall energy efficiency or intensity, reliance on different types of energy, and how they access alternative sources of energy may become increasingly material as the global regulatory focus on climate change increases, creating incentives for energy efficiency and renewable energy as well as pricing of greenhouse gas (GHG) emissions. Because energy expenditures may be significant in the industry, entities that improve operational energy efficiency may increase cost savings and profit margins.
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Ecological Impacts
The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.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
As customers increasingly pay attention to privacy issues associated with cell phone, internet and email services, Telecommunication Services entities must implement strong management practices and guidelines related to their use of customer data. Telecommunication Services entities use growing volumes of customer location, web browsing and demographic data to improve their services as well as generate revenue by selling such data to third parties. Growing public concern about privacy may result in increased regulatory scrutiny over the use, collection and sale of consumer data. These trends increase the importance of Telecommunication Services entities adopting and communicating policies about providing customer data to third parties transparently, including the amount and type of data provided and the nature of its use (for example, use for commercial purposes). Additionally, Telecommunication Services entities receive, and must determine whether to comply with, government requests for customer information. Entities in the industry that fail to manage data privacy may be susceptible to decreased revenues because of lost consumer confidence and churn, as well as to financial effects stemming from legal exposures.
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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
The Telecommunication Services industry is particularly vulnerable to data security threats because entities manage an increasing volume of customer data, including personally identifiable information, as well as demographic, behavioural and location data. Inadequate prevention, detection and remediation of data security threats may influence customer acquisition and retention and result in decreased market share and lower 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. As the providers of critical infrastructure, the ability of entities to combat cyber-attacks may affect reputation and brand value, with a long-term effect on market share and revenue growth potential. Therefore, entities that identify and manage data security risks in a timely manner may be in a better position to protect market share and brand value while also reducing risk exposure to cyber-attacks. Additionally, new and emerging data security standards and regulations may affect the operating expenses of entities through increased costs of compliance.
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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.None -
Employee Health & Safety
The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.None -
Product Design & Lifecycle Management
The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.None -
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.-
Product End-of-life Management
Because of the rapid obsolescence of communications devices, particularly mobile phones, they represent an increasing proportion of electronic waste (e-waste) going to landfills, driven in part by a low recycling rate. Telecommunication Services entities face growing regulatory risks related to this issue. Numerous jurisdictions have implemented e-waste recycling laws mandating that electronics retailers and manufacturers create a system for recycling, reuse or proper disposal of electronic devices. Although in their early days many of these laws covered a limited scope of products, recent laws extend to mobile devices, requiring entities to finance the collection, treatment, recycling or proper disposal of e-waste, as concerns around e-waste from communications devices increase. E-waste laws often require vendors or manufacturers to pay for waste recycling or product take-back and recycling programmes. Penalties or costs, because of such laws, together with potential revenues generated from refurbishing and re-selling products, increasingly are providing incentives for entities in the industry to manage end-of-life impacts. Many Telecommunication Services entities work in partnership with phone manufacturers to bundle telecom services and mobile devices, and therefore have a shared responsibility for end-of-life management of such devices. Their relationship with customers provides an opportunity for effective management of product recycling, reuse and disposal. Establishing take-back programmes to recover end-of-life materials for further reuse, recycling or remanufacturing may increase cost savings and develop a more resilient supply of manufacturing materials.
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Business Ethics
The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.None -
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).-
Competitive Behaviour & Open Internet
The Telecommunication Services industry contains classic examples of natural monopolies, where high capital costs allow them to offer the most efficient production. Given the concentrated nature of telecommunications, cable and satellite entities, they must manage their growth strategies within the parameters of a regulatory landscape designed to ensure competition. In addition to natural monopoly, many entities in this industry benefit from terminal access monopolies over the so-called ‘last-mile’ of their networks, given their contractual relationship with each subscriber and the barriers for subscribers to change service providers. The nature of this relationship is the basis of much of the discussion regarding an open internet, where all data on the internet is treated equally in terms of performance and access. The industry faces legislative and regulatory actions to ensure competition, which may limit the market share and growth potential of some larger players. Merger and acquisition activity by dominant market players has come under regulatory scrutiny. This has resulted in entities abandoning plans to consolidate, affecting their value. Strong reliance on market dominance also may be a source of risk if entities are vulnerable to legal challenges, increasing their risk profile and cost of capital.
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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
Given the systemic importance of telecommunications networks, systemic or economy-wide disruption may result if the Telecommunication Services network infrastructure is unreliable and prone to business continuity risks. As the frequency of extreme weather events associated with climate change increases, Telecommunication Services entities may face growing physical threats to network infrastructure, with potentially significant social or systemic impacts. In the absence of resilient and reliable infrastructure, entities may lose revenue associated with service disruptions or face unplanned capital expenditures to repair damaged or compromised equipment. Entities that successfully manage business continuity risks, including identifying critical business operations, and that enhance resilience of the system may substantially reduce their risk exposure and decrease their cost of capital. While implementation of such measures may have upfront costs, entities may gain long-term benefits in terms of lower remediation expenses in cases of high-impact disruptions.
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Access Standard
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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.None -
Ecological Impacts
The category addresses management of the company’s impacts on ecosystems and biodiversity through activities including, but not limited to, land use for exploration, natural resource extraction, and cultivation, as well as project development, construction, and siting. The impacts include, but are not limited to, biodiversity loss, habitat destruction, and deforestation at all stages – planning, land acquisition, permitting, development, operations, and site remediation. The category does not cover impacts of climate change on ecosystems and biodiversity.-
Environmental Impacts of Project Development
Infrastructure construction projects improve economic and social development; however, they also may pose risks to the local environment and surrounding communities. Industry activities can disrupt local ecosystems through biodiversity impacts, air emissions, water discharges, natural resource consumption, waste generation and hazardous chemicals use. Construction entities perform clearing, grading and excavation activities and may generate harmful waste during project construction. Effectively assessing environmental impacts before construction may mitigate unforeseen issues that may increase operational expenses and capital costs. In some cases, environmental concerns or local community pushback may result in project delays and, in extreme cases, project cancellations, which may affect an entity’s profitability and growth opportunities. Failure to comply with environmental regulations during construction may result in costly fines and remediation costs, and it can damage an entity’s reputation. Environmental impact assessments can provide an understanding of a project’s potential environmental impacts and necessary mitigation activities before it begins. Likewise, proper management of environmental risks during project construction may reduce regulatory oversight or community pushback. By assessing environmental considerations before project initiation, as well as continuing to evaluate them during project development, engineering and construction entities may be prepared to mitigate potential environmental issues and the associated financial risks that may occur, while also establishing a competitive advantage for obtaining new contracts with prospective clients.
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Customer Privacy
The category addresses management of risks related to the use of personally identifiable information (PII) and other customer or user data for secondary purposes including but not limited to marketing through affiliates and non-affiliates. The scope of the category includes social issues that may arise from a company’s approach to collecting data, obtaining consent (e.g., opt-in policies), managing user and customer expectations regarding how their data is used, and managing evolving regulation. It excludes social issues arising from cybersecurity risks, which are covered in a separate category.None -
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.-
Structural Integrity & Safety
Whether providing engineering, design, architectural, consulting, inspection, construction or maintenance services, entities in this industry have a professional responsibility to ensure the safety and integrity of their work. Errors or inadequate quality in the project design phase and construction of buildings or infrastructure may result in significant personal injury, loss of property value and economic harm. Entities that manage structural integrity and safety poorly may incur incremental costs because of redesign or repair work and legal liabilities, as well as reputational damage that could hurt growth prospects. Moreover, when designing and constructing buildings or infrastructure, entities in the industry increasingly must contemplate potential climate change impacts, which may affect the project’s structural integrity and public safety. Compliance with minimum applicable codes and standards may not be enough to maintain and grow reputational value (or even mitigate legal liabilities) in some circumstances, especially if the frequency and severity of climate-change-related events increases as expected. Meeting or exceeding new industry quality standards, and setting up internal control procedures to identify and fix potential design issues, including those resulting from climate risks, are practices that may help entities reduce these risks.
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Employee Health & Safety
The category addresses a company’s ability to create and maintain a safe and healthy workplace environment that is free of injuries, fatalities, and illness (both chronic and acute). It is traditionally accomplished through implementing safety management plans, developing training requirements for employees and contractors, and conducting regular audits of their own practices as well as those of their subcontractors. The category further captures how companies ensure physical and mental health of workforce through technology, training, corporate culture, regulatory compliance, monitoring and testing, and personal protective equipment.-
Workforce Health & Safety
Construction, maintenance and repair services and other on-site activities require substantial manual labour. Fatality and injury rates in the Engineering & Construction Services industry are high compared with those in other industries because of the workforce’s exposure to powered haulage and heavy machinery accidents, fall accidents, exposure to hazardous chemicals, and other unique and potentially dangerous situations. Additionally, temporary workers may be at a higher risk because of a lack of training or industry experience. Failing to protect worker health and safety can result in fines and penalties; serious incidents may result in acute, one-time extraordinary expenses and contingent liabilities from legal or regulatory actions. In addition, health and safety incidents may result in project delays and downtime that increase project costs and decrease profitability. Entities that seek to train both permanent and temporary employees professionally and build a strong safety culture may reduce their risk profile while potentially gaining a competitive advantage in new project bids and proposals because of good workforce health and safety statistics.
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Product Design & Lifecycle Management
The category addresses incorporation of environmental, social, and governance (ESG) considerations in characteristics of products and services provided or sold by the company. It includes, but is not limited to, managing the lifecycle impacts of products and services, such as those related to packaging, distribution, use-phase resource intensity, and other environmental and social externalities that may occur during their use-phase or at the end of life. The category captures a company’s ability to address customer and societal demand for more sustainable products and services as well as to meet evolving environmental and social regulation. It does not address direct environmental or social impacts of the company’s operations nor does it address health and safety risks to consumers from product use, which are covered in other categories.-
Lifecycle Impacts of Buildings & Infrastructure
Buildings and major infrastructure projects are among the largest users of natural resources in the economy; during construction, these materials include iron and steel products, cement, concrete, bricks, drywall, wallboards, glass, insulation, fixtures, doors, and cabinetry, among others. Once completed, and during their daily use, these projects often consume significant amounts of resources in the form of energy and water (for a discussion on direct environmental impacts from project construction see the Environmental Impacts of Project Development topic). Therefore, the sourcing of construction materials and the everyday use of buildings and infrastructure may contribute to direct and indirect greenhouse gas (GHG) emissions, global or local resource constraints, water stress and negative human health outcomes. Client and regulatory pressures to develop a sustainable built environment are contributing to the growth of markets intended to reduce the lifecycle impacts of buildings and infrastructure projects. In response, various international sustainable building and infrastructure certification schemes assess, among other aspects, a project’s use-phase energy and water efficiency, impacts on human health, and the use of sustainable construction and building materials. As a result, various opportunities are being created for industries in the value chain—from suppliers that can provide such materials, to entities in the Engineering & Construction Services industry that can provide sustainability-oriented project design, consulting and construction services. Such services can provide a competitive advantage and revenue growth opportunities as client demand for economically advantageous sustainable projects increases and related regulations evolve. Entities unable to effectively integrate such considerations into their services may lose market share in the long term. -
Climate Impacts of Business Mix
Engineering & Construction Services industry clients may be exposed to potentially disruptive climate regulation as well as those that mitigate climate change. Some types of construction projects are significant climate change contributors because of the greenhouse gases (GHGs) emitted during their use phase. Projects that may contribute to global GHG emissions include those in extractive industries, as well as large buildings. Whereas some infrastructure projects, such as renewable energy projects, are designed to reduce GHG emissions, many types of projects present trade-offs. Mass transit systems, for example, may contribute to GHG emissions while reducing net emissions once the benefits offered by the system are factored. Several entities in the industry generate a substantial share of revenue and profits from clients in carbon-intensive industries and whose future capital investments may be at risk because of evolving climate regulations. Downside risks may manifest through project delays, cancellations and diminished long-term revenue growth opportunities. On the other hand, entities that specialise in infrastructure projects that contribute to GHG mitigation could develop competitive advantages as they continue to focus on these growing markets. As the industry and its customers continue to operate within an uncertain business environment and face increasing environmental and regulatory requirements, assessing and communicating the risks and opportunities stemming from climate change that are embedded in an entity’s backlog and future business prospects may help investors in assessing the overall business impact of climate change.
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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.None -
Business Ethics
The category addresses the company’s approach to managing risks and opportunities surrounding ethical conduct of business, including fraud, corruption, bribery and facilitation payments, fiduciary responsibilities, and other behaviour that may have an ethical component. This includes sensitivity to business norms and standards as they shift over time, jurisdiction, and culture. It addresses the company’s ability to provide services that satisfy the highest professional and ethical standards of the industry, which means to avoid conflicts of interest, misrepresentation, bias, and negligence through training employees adequately and implementing policies and procedures to ensure employees provide services free from bias and error.-
Business Ethics
Entities in the industry face risks associated with bribery, corruption and anti-competitive practices. Several factors contribute to these risks, including global operations, managing many local agents and subcontractors, project financing and project permitting complexity, the magnitude of the contracts involved in building large infrastructure projects, and the competitive process to secure contracts with private and public entities. Ethical breaches may result in regulatory authority investigations, as well as large fines, settlement costs and damaged reputations. Such breaches may include violations of anti-bribery laws, such as paying government officials to gain project contracts. They also may include unethical bidding practices, such as complementary bidding (for example, submitting an artificially high or otherwise unacceptable bid for a contract that a bidder does not intend to win) and bid-pooling (for example, coordinating to split contracts and ensure each bidder is awarded a specific amount of work). Moreover, entities with poor track records may be barred from future projects, resulting in lost revenue. Developing an ethical culture through employee training, effective governance structures and internal controls is critical for entities to mitigate business ethics risks.
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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).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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General Issue Category
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Telecommunication Services
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Engineering & Construction Services
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Energy Management
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Environmental Footprint of Operations
Individual Telecommunication Services entities consume substantial amounts of energy. Depending on the source of energy and generation efficiency, electricity consumption by telecom network infrastructure can contribute significantly to environmental externalities, such as climate change, creating sustainability risks for the industry. Although network equipment and data centres are becoming more energy efficient, their overall energy consumption is increasing with the expansion in telecommunications infrastructure and data traffic. How Telecommunication Services entities manage their overall energy efficiency or intensity, reliance on different types of energy, and how they access alternative sources of energy may become increasingly material as the global regulatory focus on climate change increases, creating incentives for energy efficiency and renewable energy as well as pricing of greenhouse gas (GHG) emissions. Because energy expenditures may be significant in the industry, entities that improve operational energy efficiency may increase cost savings and profit margins.
Ecological Impacts
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Environmental Impacts of Project Development
Infrastructure construction projects improve economic and social development; however, they also may pose risks to the local environment and surrounding communities. Industry activities can disrupt local ecosystems through biodiversity impacts, air emissions, water discharges, natural resource consumption, waste generation and hazardous chemicals use. Construction entities perform clearing, grading and excavation activities and may generate harmful waste during project construction. Effectively assessing environmental impacts before construction may mitigate unforeseen issues that may increase operational expenses and capital costs. In some cases, environmental concerns or local community pushback may result in project delays and, in extreme cases, project cancellations, which may affect an entity’s profitability and growth opportunities. Failure to comply with environmental regulations during construction may result in costly fines and remediation costs, and it can damage an entity’s reputation. Environmental impact assessments can provide an understanding of a project’s potential environmental impacts and necessary mitigation activities before it begins. Likewise, proper management of environmental risks during project construction may reduce regulatory oversight or community pushback. By assessing environmental considerations before project initiation, as well as continuing to evaluate them during project development, engineering and construction entities may be prepared to mitigate potential environmental issues and the associated financial risks that may occur, while also establishing a competitive advantage for obtaining new contracts with prospective clients.
Customer Privacy
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Data Privacy
As customers increasingly pay attention to privacy issues associated with cell phone, internet and email services, Telecommunication Services entities must implement strong management practices and guidelines related to their use of customer data. Telecommunication Services entities use growing volumes of customer location, web browsing and demographic data to improve their services as well as generate revenue by selling such data to third parties. Growing public concern about privacy may result in increased regulatory scrutiny over the use, collection and sale of consumer data. These trends increase the importance of Telecommunication Services entities adopting and communicating policies about providing customer data to third parties transparently, including the amount and type of data provided and the nature of its use (for example, use for commercial purposes). Additionally, Telecommunication Services entities receive, and must determine whether to comply with, government requests for customer information. Entities in the industry that fail to manage data privacy may be susceptible to decreased revenues because of lost consumer confidence and churn, as well as to financial effects stemming from legal exposures.
Data Security
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Data Security
The Telecommunication Services industry is particularly vulnerable to data security threats because entities manage an increasing volume of customer data, including personally identifiable information, as well as demographic, behavioural and location data. Inadequate prevention, detection and remediation of data security threats may influence customer acquisition and retention and result in decreased market share and lower 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. As the providers of critical infrastructure, the ability of entities to combat cyber-attacks may affect reputation and brand value, with a long-term effect on market share and revenue growth potential. Therefore, entities that identify and manage data security risks in a timely manner may be in a better position to protect market share and brand value while also reducing risk exposure to cyber-attacks. Additionally, new and emerging data security standards and regulations may affect the operating expenses of entities through increased costs of compliance.
Product Quality & Safety
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Structural Integrity & Safety
Whether providing engineering, design, architectural, consulting, inspection, construction or maintenance services, entities in this industry have a professional responsibility to ensure the safety and integrity of their work. Errors or inadequate quality in the project design phase and construction of buildings or infrastructure may result in significant personal injury, loss of property value and economic harm. Entities that manage structural integrity and safety poorly may incur incremental costs because of redesign or repair work and legal liabilities, as well as reputational damage that could hurt growth prospects. Moreover, when designing and constructing buildings or infrastructure, entities in the industry increasingly must contemplate potential climate change impacts, which may affect the project’s structural integrity and public safety. Compliance with minimum applicable codes and standards may not be enough to maintain and grow reputational value (or even mitigate legal liabilities) in some circumstances, especially if the frequency and severity of climate-change-related events increases as expected. Meeting or exceeding new industry quality standards, and setting up internal control procedures to identify and fix potential design issues, including those resulting from climate risks, are practices that may help entities reduce these risks.
Employee Health & Safety
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Workforce Health & Safety
Construction, maintenance and repair services and other on-site activities require substantial manual labour. Fatality and injury rates in the Engineering & Construction Services industry are high compared with those in other industries because of the workforce’s exposure to powered haulage and heavy machinery accidents, fall accidents, exposure to hazardous chemicals, and other unique and potentially dangerous situations. Additionally, temporary workers may be at a higher risk because of a lack of training or industry experience. Failing to protect worker health and safety can result in fines and penalties; serious incidents may result in acute, one-time extraordinary expenses and contingent liabilities from legal or regulatory actions. In addition, health and safety incidents may result in project delays and downtime that increase project costs and decrease profitability. Entities that seek to train both permanent and temporary employees professionally and build a strong safety culture may reduce their risk profile while potentially gaining a competitive advantage in new project bids and proposals because of good workforce health and safety statistics.
Product Design & Lifecycle Management
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Lifecycle Impacts of Buildings & Infrastructure
Buildings and major infrastructure projects are among the largest users of natural resources in the economy; during construction, these materials include iron and steel products, cement, concrete, bricks, drywall, wallboards, glass, insulation, fixtures, doors, and cabinetry, among others. Once completed, and during their daily use, these projects often consume significant amounts of resources in the form of energy and water (for a discussion on direct environmental impacts from project construction see the Environmental Impacts of Project Development topic). Therefore, the sourcing of construction materials and the everyday use of buildings and infrastructure may contribute to direct and indirect greenhouse gas (GHG) emissions, global or local resource constraints, water stress and negative human health outcomes. Client and regulatory pressures to develop a sustainable built environment are contributing to the growth of markets intended to reduce the lifecycle impacts of buildings and infrastructure projects. In response, various international sustainable building and infrastructure certification schemes assess, among other aspects, a project’s use-phase energy and water efficiency, impacts on human health, and the use of sustainable construction and building materials. As a result, various opportunities are being created for industries in the value chain—from suppliers that can provide such materials, to entities in the Engineering & Construction Services industry that can provide sustainability-oriented project design, consulting and construction services. Such services can provide a competitive advantage and revenue growth opportunities as client demand for economically advantageous sustainable projects increases and related regulations evolve. Entities unable to effectively integrate such considerations into their services may lose market share in the long term. -
Climate Impacts of Business Mix
Engineering & Construction Services industry clients may be exposed to potentially disruptive climate regulation as well as those that mitigate climate change. Some types of construction projects are significant climate change contributors because of the greenhouse gases (GHGs) emitted during their use phase. Projects that may contribute to global GHG emissions include those in extractive industries, as well as large buildings. Whereas some infrastructure projects, such as renewable energy projects, are designed to reduce GHG emissions, many types of projects present trade-offs. Mass transit systems, for example, may contribute to GHG emissions while reducing net emissions once the benefits offered by the system are factored. Several entities in the industry generate a substantial share of revenue and profits from clients in carbon-intensive industries and whose future capital investments may be at risk because of evolving climate regulations. Downside risks may manifest through project delays, cancellations and diminished long-term revenue growth opportunities. On the other hand, entities that specialise in infrastructure projects that contribute to GHG mitigation could develop competitive advantages as they continue to focus on these growing markets. As the industry and its customers continue to operate within an uncertain business environment and face increasing environmental and regulatory requirements, assessing and communicating the risks and opportunities stemming from climate change that are embedded in an entity’s backlog and future business prospects may help investors in assessing the overall business impact of climate change.
Materials Sourcing & Efficiency
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Product End-of-life Management
Because of the rapid obsolescence of communications devices, particularly mobile phones, they represent an increasing proportion of electronic waste (e-waste) going to landfills, driven in part by a low recycling rate. Telecommunication Services entities face growing regulatory risks related to this issue. Numerous jurisdictions have implemented e-waste recycling laws mandating that electronics retailers and manufacturers create a system for recycling, reuse or proper disposal of electronic devices. Although in their early days many of these laws covered a limited scope of products, recent laws extend to mobile devices, requiring entities to finance the collection, treatment, recycling or proper disposal of e-waste, as concerns around e-waste from communications devices increase. E-waste laws often require vendors or manufacturers to pay for waste recycling or product take-back and recycling programmes. Penalties or costs, because of such laws, together with potential revenues generated from refurbishing and re-selling products, increasingly are providing incentives for entities in the industry to manage end-of-life impacts. Many Telecommunication Services entities work in partnership with phone manufacturers to bundle telecom services and mobile devices, and therefore have a shared responsibility for end-of-life management of such devices. Their relationship with customers provides an opportunity for effective management of product recycling, reuse and disposal. Establishing take-back programmes to recover end-of-life materials for further reuse, recycling or remanufacturing may increase cost savings and develop a more resilient supply of manufacturing materials.
Business Ethics
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Business Ethics
Entities in the industry face risks associated with bribery, corruption and anti-competitive practices. Several factors contribute to these risks, including global operations, managing many local agents and subcontractors, project financing and project permitting complexity, the magnitude of the contracts involved in building large infrastructure projects, and the competitive process to secure contracts with private and public entities. Ethical breaches may result in regulatory authority investigations, as well as large fines, settlement costs and damaged reputations. Such breaches may include violations of anti-bribery laws, such as paying government officials to gain project contracts. They also may include unethical bidding practices, such as complementary bidding (for example, submitting an artificially high or otherwise unacceptable bid for a contract that a bidder does not intend to win) and bid-pooling (for example, coordinating to split contracts and ensure each bidder is awarded a specific amount of work). Moreover, entities with poor track records may be barred from future projects, resulting in lost revenue. Developing an ethical culture through employee training, effective governance structures and internal controls is critical for entities to mitigate business ethics risks.
Competitive Behaviour
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Competitive Behaviour & Open Internet
The Telecommunication Services industry contains classic examples of natural monopolies, where high capital costs allow them to offer the most efficient production. Given the concentrated nature of telecommunications, cable and satellite entities, they must manage their growth strategies within the parameters of a regulatory landscape designed to ensure competition. In addition to natural monopoly, many entities in this industry benefit from terminal access monopolies over the so-called ‘last-mile’ of their networks, given their contractual relationship with each subscriber and the barriers for subscribers to change service providers. The nature of this relationship is the basis of much of the discussion regarding an open internet, where all data on the internet is treated equally in terms of performance and access. The industry faces legislative and regulatory actions to ensure competition, which may limit the market share and growth potential of some larger players. Merger and acquisition activity by dominant market players has come under regulatory scrutiny. This has resulted in entities abandoning plans to consolidate, affecting their value. Strong reliance on market dominance also may be a source of risk if entities are vulnerable to legal challenges, increasing their risk profile and cost of capital.
Systemic Risk Management
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Managing Systemic Risks from Technology Disruptions
Given the systemic importance of telecommunications networks, systemic or economy-wide disruption may result if the Telecommunication Services network infrastructure is unreliable and prone to business continuity risks. As the frequency of extreme weather events associated with climate change increases, Telecommunication Services entities may face growing physical threats to network infrastructure, with potentially significant social or systemic impacts. In the absence of resilient and reliable infrastructure, entities may lose revenue associated with service disruptions or face unplanned capital expenditures to repair damaged or compromised equipment. Entities that successfully manage business continuity risks, including identifying critical business operations, and that enhance resilience of the system may substantially reduce their risk exposure and decrease their cost of capital. While implementation of such measures may have upfront costs, entities may gain long-term benefits in terms of lower remediation expenses in cases of high-impact disruptions.