Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Airlines Airlines industry entities provide air transportation globally to passengers for both leisure and business purposes. This includes commercial full-service, low-cost and regional airlines. Full-service carriers typically use a hub-and-spoke model to design their routes within countries and internationally. Low-cost carriers usually offer a smaller number of routes as well as no-frills service to their customers. Regional carriers typically operate under contract to full-service carriers, expanding the network of the larger carriers. Many airline entities also have a cargo segment in their operations to generate additional revenue. Entities in the industry commonly form partnerships or join alliances to increase network size. Operating as an alliance allows airlines to offer customers access to international or otherwise underserved itineraries on more than one airline under one ticket. At the same time, airlines share some overhead costs and increase their competitive position in the global market without having to operate outside their home country.
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  • 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.
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Relevant Issues for both Industries (9 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.
  • Airlines Remove
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    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
      • Greenhouse Gas Emissions As a result of a heavy reliance on hydrocarbon fuels, the Airlines industry generates significant emissions, more than 99% of which are in the form of carbon dioxide (CO2). Therefore, the industry is subject to compliance costs and risks associated with climate change mitigation policies. The main sources of greenhouse gas (GHG) emissions for airlines entities are aircraft fuel use and emissions, ground equipment and facility electricity. Aircraft fuel consumption is the largest contributor to total emissions from the industry, and fuel management is a critical part of reducing emissions. Management of fuel-related environmental impacts includes increasing fuel efficiency through fleet upgrades, retrofits, and flight speed and route design optimisation, as well as using alternative and sustainable fuels. These initiatives require capital expenditures, but in the long term, they may reduce fuel costs and decrease exposure to GHG emissions programmes and regulatory risk.
    • 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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    • 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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    • Labour Practices The category addresses the company’s ability to uphold commonly accepted labour standards in the workplace, including compliance with labour laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labour, forced or bonded labour, exploitative labour, fair wages and overtime pay, and other basic workers’ rights. It also includes minimum wage policies and provision of benefits, which may influence how a workforce is attracted, retained, and motivated. The category further addresses a company’s relationship with organized labour and freedom of association.
      • Labour Practices Collective agreements cover many workers in the Airlines industry and guide fair wage discussions, safe working conditions and freedom of association, which are among basic worker rights. The organising of essential personnel and increased wages or benefits may result in higher labour costs. At the same time, labour practices may affect long-term business profitability. Effective management of, and communication associated with, issues such as worker pay and working conditions may prevent conflicts with workers that could result in extended periods of strikes, which may slow or suspend operations and damage an entity’s reputation, potentially reducing revenue and market share.
    • 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.
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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.
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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.
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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).
      • Competitive Behaviour The Airlines industry is characterised by competitive margins because of high fixed capital and labour costs and competition with government-subsidised carriers in some markets. Airlines often seek cost savings using economies of scale with alliances or consolidation, which may result in market concentration. The industry also has high barriers to entry because of limited landing rights and increasing airport congestion. Together, these characteristics may encourage entities to engage in anti-competitive practices that increase consumer prices. As a result, antitrust authorities have scrutinised some airline industry practices such as airport slot management, predatory pricing, and alliances and mergers. Legal fees, reputational risk, delayed merger or acquisition transaction costs, and limits to growth through acquisition or merger may create material risks for investors.
    • Critical Incident Risk Management The category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur.
      • Accident & Safety Management Air travel accidents may result in significant consequences. Passenger safety is paramount in the Airlines industry. Although air travel is one of the safest transport modes, airlines are held to very high safety standards, and consumers expect accident-free operations. Furthermore, since products transported by air tend to be high-value or perishable goods, delivering them safely and in a timely manner is a priority for any carrier. Airline accidents may result in significant environmental and social externalities and require entities to pay for remediation and victim compensation. Safety incidents or violations of safety regulations may affect an entity’s reputation, increasing its risk and cost of capital, resulting in reduced consumer demand and revenues. Even if they occur rarely, larger accidents may result in significant, long-term effects on brand value and revenue growth. Providing adequate employee safety training and ensuring the health and well-being of crew members is critical to ensuring safety. Timely and competent aircraft maintenance may minimise the chances of technical failure and regulatory penalties for non-compliance.
  • Engineering & Construction Services Remove
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    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
      None
    • 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.
    • 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.
    • Labour Practices The category addresses the company’s ability to uphold commonly accepted labour standards in the workplace, including compliance with labour laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labour, forced or bonded labour, exploitative labour, fair wages and overtime pay, and other basic workers’ rights. It also includes minimum wage policies and provision of benefits, which may influence how a workforce is attracted, retained, and motivated. The category further addresses a company’s relationship with organized labour and freedom of association.
      None
    • Employee 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.
    • 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.
    • 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.
    • Competitive Behaviour The category covers social issues associated with existence of monopolies, which may include, but are not limited to, excessive prices, poor quality of service, and inefficiencies. It addresses a company’s management of legal and social expectation around monopolistic and anti-competitive practices, including issues related to bargaining power, collusion, price fixing or manipulation, and protection of patents and intellectual property (IP).
      None
    • Critical Incident Risk Management The category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur.
      None

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