Industry Comparison

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Current language: English (2023)

You are viewing information about the following Industries:

  • Auto Parts Entities in the Auto Parts industry supply motor vehicle parts and accessories to original equipment manufacturers (OEM). Auto parts entities typically specialise in manufacturing and assembling parts or accessories, such as engine exhaust systems, alternative drivetrains, hybrid systems, catalytic converters, aluminium wheels (rims), tyres, rear-view mirrors, and onboard electrical and electronic equipment. Although the larger automotive industry includes several tiers of suppliers that provide parts and raw materials used to assemble motor vehicles, the scope of these Auto Parts industry disclosures includes only Tier 1 suppliers that supply parts directly to OEMs. The scope of the industry excludes captive suppliers, such as engine and stamping facilities, owned and operated by OEMs. It also excludes Tier 2 suppliers, which provide inputs for the Auto Parts industry.
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  • Non-Alcoholic Beverages The Non-Alcoholic Beverages industry produces a broad range of beverage products, including various carbonated soft drinks, syrup concentrates, juices, energy and sport drinks, teas, coffee and water products. The industry is dominated by large, international entities. Entities conduct syrup manufacturing, marketing, bottling operations and distribution, with larger entities typically being more vertically integrated into operations that bottle, sell and distribute the finished products.
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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.

Disclosure Topics

What is the relationship between General Issue Category and Disclosure Topics? The General Issue Category is an industry-agnostic version of the Disclosure Topics that appear in each SASB Standard. Disclosure topics represent the industry-specific impacts of General Issue Categories. The industry-specific Disclosure Topics ensure each SASB Standard is tailored to the industry, while the General Issue Categories enable comparability across industries. For example, Health & Nutrition is a disclosure topic in the Non-Alcoholic Beverages industry, representing an industry-specific measure of the general issue of Customer Welfare. The issue of Customer Welfare, however, manifests as the Counterfeit Drugs disclosure topic in the Biotechnology & Pharmaceuticals industry.
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    • 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).
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    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management Most energy consumed in the automobile manufacturing process occurs in the supply chain. Auto parts manufacturers use electricity and fossil fuels in their production processes, resulting in direct and indirect emissions of greenhouse gases (GHGs). Purchased electricity is a majority of the energy used in the Auto Parts industry. Sustainability initiatives such as incentives for energy efficiency and renewable energy are making alternative sources of energy more cost competitive. Regulators and consumers also are encouraging the industry to reduce GHG emissions. While managing the cost and risks associated with overall energy efficiency, reliance on various types of energy and access to alternative energy sources may become increasingly important.
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
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    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
      • Waste Management Manufacturing auto parts involves using significant amounts of materials (including steel, iron, aluminium and plastics, among others). Waste generated by the industry includes machine lubricants and coolants, aqueous and solvent cleaning systems, paint, and scrap metals and plastics. Auto parts manufacturers spend a significant proportion of revenue on the cost of materials. Therefore, entities that manage manufacturing inputs properly by reducing and recycling waste may mitigate price volatility and supply disruption risks. Moreover, auto parts manufacturers may achieve cost savings and improve operational efficiency by increasing the proportion of waste recycled. Equally, auto parts manufacturers whose waste management practices create negative environmental impacts may face increased regulatory oversight. Violating environmental regulations may increase legal expenses as well as capital expenditures for pollution-control facilities and occupational health and safety projects.
    • 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.
      • Product Safety Driving is a risky activity, since distracted driving, speeding, drunk driving, dangerous weather conditions and other factors may result in accidents that expose drivers, passengers and bystanders to injuries and deaths. Accidents can also be caused by defective vehicle parts, and an entity’s failure to detect defects before vehicles are sold may have significant financial repercussions for both automobile and auto parts manufacturers. Entities improving vehicle safety and responding quickly when defects are identified may mitigate potentially costly regulatory action or customer lawsuits. These efforts may preserve relationships with original equipment manufacturers (OEMs), who often select Tier 1 suppliers based on their safety performance and reliability. As cars integrate more sophisticated electronics and technologies, risks related to recalls may increase. Through effective management of product safety, entities may enhance their brand value and improve sales over the long term.
    • Customer Welfare The category addresses customer welfare concerns over issues including, but not limited to, health and nutrition of foods and beverages, antibiotic use in animal production, and management of controlled substances. The category addresses the company’s ability to provide consumers with manufactured products and services that are aligned with societal expectations. It does not include issues directly related to quality and safety malfunctions of manufactured products and services, but instead addresses qualities inherent to the design and delivery of products and services where customer welfare may be in question. The scope of the category also captures companies’ ability to prevent counterfeit products.
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    • Selling Practices & Product Labeling The category addresses social issues that may arise from a failure to manage the transparency, accuracy, and comprehensibility of marketing statements, advertising, and labeling of products and services. It includes, but is not limited to, advertising standards and regulations, ethical and responsible marketing practices, misleading or deceptive labeling, as well as discriminatory or predatory selling and lending practices. This may include deceptive or aggressive selling practices in which incentive structures for employees could encourage the sale of products or services that are not in the best interest of customers or clients.
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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.
      • Design for Fuel Efficiency Automobile manufacturers increasingly are demanding motor parts and components that reduce vehicle fuel consumption. Fuel-efficient components and parts are critical in reducing automobile tailpipe emissions through energy efficiency gains and weight reductions, among other factors. Auto parts entities that design and manufacture such parts may increase sales to auto manufacturers that increasingly are facing stricter environmental regulations and customer preferences for more environmentally friendly cars.
    • Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
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    • 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.
      • Materials Sourcing Entities in the Auto Parts industry commonly rely on rare earth metals and other critical materials as important inputs for finished products. Many of these inputs have few substitutes and often are sourced from a few countries, many of which may be subject to geopolitical uncertainty. Other sustainability-related impacts such as climate change, land use, resource scarcity and conflict in regions where the industry’s supply chain operates are also increasingly shaping the industry’s ability to source materials. Additionally, increased competition for these materials because of growing global demand from other sectors may result in price increases and supply risks. These materials play a crucial role in clean energy technologies, such as electric and hybrid vehicles. As regulators strive to reduce greenhouse gas emissions and consumers demand more fuel-efficient vehicles, the share of hybrids and zero-emission vehicles (ZEVs) produced by the Automobiles industry may continue to increase in the future. Entities that limit the use of critical materials, secure sourcing and develop alternatives may mitigate supply disruptions and volatile input prices, which could adversely affect their margins, risk profile and cost of capital.
      • Materials Efficiency Millions of vehicles worldwide reach the end of their useful lives every year. At the same time, the rate of vehicle ownership is expanding globally, resulting in more end-of-life vehicles. To reduce vehicle lifecycle impact, auto parts manufacturers may design parts to be more easily recyclable and reusable, and apply modularity principles to product design. They also may sponsor take-back programmes to ensure safe product disposal and reuse. Given input price volatility and resource constraints, entities that manage materials efficiency may improve their long-term operational efficiency and risk profile. In addition, entities may reduce manufacturing costs by using fewer materials or by recycling materials, which may improve their margins.
    • 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 Competitive business practices are an important governance issue for entities in the Auto Parts industry. Although industry concentration is low, a wide range of auto parts are available, and competition for business within each category of parts may be limited. Therefore, leading producers of any specific auto part may wield substantial market power in specific market segments, creating antitrust concerns. Collusion and price fixing by auto parts manufacturers may ultimately affect consumers through higher vehicle prices. If such activities are discovered, jurisdictions may impose legal or regulatory penalties, and the resulting reputational damage may adversely affect an entity’s valuation.
  • Non-Alcoholic Beverages Remove
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    • GHG Emissions The category addresses direct (Scope 1) greenhouse gas (GHG) emissions that a company generates through its operations. This includes GHG emissions from stationary (e.g., factories, power plants) and mobile sources (e.g., trucks, delivery vehicles, planes), whether a result of combustion of fuel or non-combusted direct releases during activities such as natural resource extraction, power generation, land use, or biogenic processes. The category further includes management of regulatory risks, environmental compliance, and reputational risks and opportunities, as they related to direct GHG emissions. The seven GHGs covered under the Kyoto Protocol are included within the category—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
      • Fleet Fuel Management Non-alcoholic beverages entities generate direct Scope 1 greenhouse gas (GHG) emissions from large vehicle fleets used for distribution and from manufacturing facilities. Specifically, refrigeration used in manufacturing facilities and in transport vehicles contributes a significant proportion of overall industry emissions. Efficiencies gained in fuel use can reduce costs, mitigate exposure to fossil fuel price volatility and limit emissions from production, storage and transportation of products. Long-term operational savings and regulatory risk mitigation may outweigh short-term capital expenditures in fuel efficient fleets and more energy-efficient technologies.
    • Energy Management The category addresses environmental impacts associated with energy consumption. It addresses the company’s management of energy in manufacturing and/or for provision of products and services derived from utility providers (grid energy) not owned or controlled by the company. More specifically, it includes management of energy efficiency and intensity, energy mix, as well as grid reliance. Upstream (e.g., suppliers) and downstream (e.g., product use) energy use is not included in the scope.
      • Energy Management Entities in the Non-Alcoholic Beverages industry use significant energy to operate manufacturing facilities, distribution centres and warehouses. Entities in the industry generally buy electricity from the grid. Energy generation contributes to environmental impacts, including climate change and pollution, which have the potential to indirectly, yet materially, affect the operations of non-alcoholic beverages entities. Entities can reduce energy consumption and associated greenhouse gas (GHG) emissions from their operations by implementing more efficient technologies and processes. Decisions regarding alternative fuels use, renewable energy and on-site generation of electricity, versus purchasing from the grid, can be important in influencing both the costs and reliability of the energy supply.
    • Water & Wastewater Management The category addresses a company’s water use, water consumption, wastewater generation, and other impacts of operations on water resources, which may be influenced by regional differences in the availability and quality of and competition for water resources. More specifically, it addresses management strategies including, but not limited to, water efficiency, intensity, and recycling. Lastly, the category also addresses management of wastewater treatment and discharge, including groundwater and aquifer pollution.
      • Water Management Water management relates to an entity’s direct water use, operations in water-stressed regions, and wastewater management. Entities in the Non-Alcoholic Beverages industry use a large amount of water in their operations, because water is an essential input to finished products. Given non-alcoholic beverage entities’ heavy reliance on large volumes of clean water, and increasing global water scarcity, entities may be exposed to supply disruptions that could significantly affect operations and add to costs. Entities operating in water-stressed regions that fail to address local water concerns may face further risk of losing their social licence to operate. Additionally, proper wastewater treatment is an important element of managing water issues in operations, because bottling plants release large quantities of effluents. Improving water management through increased efficiency, recycling and proper disposal, particularly in regions with baseline water stress, may result in reduced operating costs, decreased risks and higher intangible asset value.
    • Waste & Hazardous Materials Management The category addresses environmental issues associated with hazardous and non-hazardous waste generated by companies. It addresses a company’s management of solid wastes in manufacturing, agriculture, and other industrial processes. It covers treatment, handling, storage, disposal, and regulatory compliance. The category does not cover emissions to air or wastewater nor does it cover waste from end-of-life of products, which are addressed in separate categories.
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    • Product Quality & Safety The category addresses issues involving unintended characteristics of products sold or services provided that may create health or safety risks to end-users. It addresses a company’s ability to offer manufactured products and/or services that meet customer expectations with respect to their health and safety characteristics. It includes, but is not limited to, issues involving liability, management of recalls and market withdrawals, product testing, and chemicals/content/ingredient management in products.
      None
    • Customer Welfare The category addresses customer welfare concerns over issues including, but not limited to, health and nutrition of foods and beverages, antibiotic use in animal production, and management of controlled substances. The category addresses the company’s ability to provide consumers with manufactured products and services that are aligned with societal expectations. It does not include issues directly related to quality and safety malfunctions of manufactured products and services, but instead addresses qualities inherent to the design and delivery of products and services where customer welfare may be in question. The scope of the category also captures companies’ ability to prevent counterfeit products.
      • Health & Nutrition Nutritional and health concerns such as obesity, ingredient safety, nutritional content and adverse health impacts resulting from the consumption of non-alcoholic beverages are important factors in how entities compete with one another. Studies show that consuming high-calorie sugar-sweetened beverages can have adverse health consequences including higher levels of cholesterol, increased risk of heart disease and obesity. These findings may alter consumer perceptions of the industry’s products, leading to long-term shifts in purchasing decisions. Furthermore, efforts to reduce obesity, such as regulations or taxes on sugar-sweetened beverages, can influence industry profitability and demand for products. The potential for adverse health effects from other commonly used ingredients—such as artificial sweeteners—may pose additional health concerns, and entities may face related litigation or regulation. Consumer demand for improved nutritional value in emerging market segments creates new opportunities. Entities that adapt to changing consumer preferences and an evolving regulatory environment by offering healthier alternatives may capture additional market share and reduce exposure to regulatory and legal risks.
    • Selling Practices & Product Labeling The category addresses social issues that may arise from a failure to manage the transparency, accuracy, and comprehensibility of marketing statements, advertising, and labeling of products and services. It includes, but is not limited to, advertising standards and regulations, ethical and responsible marketing practices, misleading or deceptive labeling, as well as discriminatory or predatory selling and lending practices. This may include deceptive or aggressive selling practices in which incentive structures for employees could encourage the sale of products or services that are not in the best interest of customers or clients.
      • Product Labelling & Marketing Communication with consumers through product labelling and marketing is an important facet of the Non-Alcoholic Beverages industry. The accuracy and depth of information presented on product labels is important to consumers and regulators. Labelling regulations require specific and detailed product information to ensure food safety and inform consumers of the nutritional content of products. To inform purchasing decisions, consumers may seek additional information about product ingredients, such as the presence of genetically modified organism (GMO) content or other ingredients considered healthy or nutritious. The marketing practices of entities are another area of public concern, especially those targeting children or presenting potentially false or misleading nutritional information. Product labelling and marketing issues can affect competition among entities, since entities may be subject to litigation or criticism resulting from making misleading statements or failing to adapt to consumer demand for increased labelling transparency. These factors can have consequences for entities’ brand value and revenue growth. Regulations on accurate and truthful product labelling and marketing present an additional risk of penalties or litigation for entities making exaggerated or untrustworthy claims.
    • 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.
      • Packaging Lifecycle Management Packaging materials represent a significant cost to entities in the Non-Alcoholic Beverages industry. Although many non-alcoholic beverage entities do not manufacture their own bottles and packaging, they face reputational risks associated with the negative externalities that their products’ containers are associated with over their lifecycle. Entities are also directly affected by legislation regarding end-of-life management of beverage containers. Entities can work with packaging manufacturers on packaging design to reduce costs, improve brand reputation and reduce the environmental impact of packaging. Efforts to reduce the amount of material used in packaging can reduce transportation costs, exposure to supply and price volatility and the amount of virgin material extracted for manufacturing. In the end-of-life phase, take-back and recycling programmes and partnerships may meet regulations, help achieve cost savings and reduce environmental impacts. Entities that effectively manage this issue can improve profitability and reduce the cost of capital.
    • Supply Chain Management The category addresses management of environmental, social, and governance (ESG) risks within a company’s supply chain. It addresses issues associated with environmental and social externalities created by suppliers through their operational activities. Such issues include, but are not limited to, environmental responsibility, human rights, labour practices, and ethics and corruption. Management may involve screening, selection, monitoring, and engagement with suppliers on their environmental and social impacts. The category does not address the impacts of external factors – such as climate change and other environmental and social factors – on suppliers’ operations and/or on the availability and pricing of key resources, which is covered in a separate category.
      • Environmental & Social Impacts of Ingredient Supply Chain Entities in the Non-Alcoholic Beverages industry manage global supply chains to source a wide range of ingredient inputs. How entities screen, monitor and engage with suppliers on environmental and social topics affects the ability of entities to secure supplies and manage price fluctuations. Supply chain interruption can reduce revenue and negatively affect market share if entities are unable to find alternatives for important suppliers or must source ingredients at higher cost. Supply chain management issues related to labour practices, environmental responsibility, ethics or corruption also may result in regulatory fines or increased long-term operational costs for entities. The consumer-facing nature of the industry increases the reputational risks associated with supplier actions. Managing an entity’s exposure to environmental and social risks may result in improved supply chain resiliency and enhanced reputation, which provide value to shareholders. Entities can engage with important suppliers to manage environmental and social risks to improve supply chain resiliency, mitigate reputational risks, and potentially increase consumer demand or capture new market opportunities.
    • 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.
      • Ingredient Sourcing Entities in the Non-Alcoholic Beverages industry source a wide range of ingredients from suppliers worldwide. The industry’s ability to source ingredients fluctuates with supply availability, which may be affected by climate change, water scarcity, land management and other resource scarcity considerations. This exposure may result in price volatility which may affect entity profitability. Ultimately, climate change, water scarcity and land-use restrictions present risks to an entity’s long-term ability to source essential materials and ingredients. Entities that source ingredients which are more productive and less resource intensive, or work closely with suppliers to increase their adaptability to climate change and other resource scarcity risks, may reduce price volatility or supply disruptions.
    • 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).
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