Human Capital

  • Labor Practices
  • Employee Health & Safety
  • Employee Engagement, Diversity & Inclusion

Business Model & Innovation

Leadership & Governance

  • Business Ethics
  • Competitive Behavior
  • Management of the Legal & Regulatory Environment
  • Critical Incident Risk Management
  • Systemic Risk Management
General Issue Category
(industry agnostic)

Disclosure Topics (industry specific) for:
Alcoholic Beverages

Get access to the full industry standard

Energy Management

Energy Management

Companies in the Alcoholic Beverages industry rely on both purchased electricity and fuel as critical inputs for value creation. Fossil fuel and electrical energy consumption can contribute to environmental impacts, including climate change and pollution. These impacts have the potential to affect the value of companies in this industry as regulations of greenhouse gas (GHG) emissions and new incentives for energy efficiency and renewable energy could lead to increased price volatility for fossil fuels and conventional electricity while making alternative sources cost-competitive. Companies that manage their overall energy use through increased efficiency and use of alternative energy sources can increase profitability by lowering expenses and reducing risk.

Water & Wastewater Management

Water Management

Water management relates to a company’s direct water usage, the exposure of its operations to water-scarce regions, and its management of wastewater. Companies in the Alcoholic Beverages industry use a large amount of water in their operations, as water is a key input to their finished products. Given alcoholic beverage companies’ heavy reliance on large volumes of clean water and the fact that water stress is increasing in different regions globally, companies may be exposed to supply disruptions that could significantly impact operations and add to costs. Companies operating in water-stressed regions that fail to address local water concerns may face further risk of losing their social license to operate. Improving water management through increased efficiency and recycling, particularly in regions with baseline water stress, can lead to lower operating costs, reduced risk, and higher intangible asset value.

Selling Practices & Product Labeling

Responsible Drinking & Marketing

The irresponsible consumption of alcoholic beverages can lead to negative social externalities such as drunk driving, addiction, public health issues, underage drinking, and even death. Every year, irresponsible alcohol consumption contributes to millions of deaths worldwide, a large portion of which includes underage youth and young adults. The harmful use of alcohol is a growing concern, particularly in developing countries that do not have laws to protect against alcohol’s detrimental effects. Alcoholic beverage companies may be forced to internalize the costs of these social externalities through taxes, lawsuits, or reputational harm, which can have a material impact on operations and financial results. Failing to properly manage social externalities may lead to further unfavorable regulation and erode the industry’s social license to operate. Through education, engagement, community partnerships, and responsible marketing, particularly to underage individuals, companies can address and mitigate many of the social externalities associated with alcohol misuse. Companies that effectively manage this issue can reduce the likelihood of extraordinary expenses, improve market share, and decrease liabilities.

Product Design & Lifecycle Management

Packaging Lifecycle Management

Packaging materials represent a significant cost to companies in the Alcoholic Beverages industry. Although many alcoholic beverage companies do not manufacture their own bottles and packaging, they face reputational risks associated with the negative externalities that their products’ containers can create over their lifecycle. Companies are also directly impacted by legislation regarding end-of-life management of beverage containers. Alcoholic beverage companies can work with packaging manufacturers on packaging design to generate cost savings, improve brand reputation, and reduce the environmental impact. Efforts to reduce the amount of materials used in packaging can reduce transportation costs, exposure to supply and price volatility, and the amount of virgin materials extracted. In the end-of-life phase, take-back and recycling programs and partnerships can pre-empt regulation, help achieve cost savings, and reduce environmental impact. Companies that effectively manage this issue can improve profitability and reduce cost of capital.

Supply Chain Management

Environmental & Social Impacts of Ingredient Supply Chain

Companies in the Alcoholic Beverages industry manage global supply chains to source a wide range of ingredient inputs. How companies screen, monitor, and engage with suppliers on environmental and social topics affects companies’ ability to secure supply and manage price fluctuations. Supply chain interruption can cause loss of revenue and negatively impact market share if companies are not able to find alternatives for key suppliers or have to source ingredients at higher cost. Supply chain management issues related to labor practices, environmental responsibility, ethics or corruption may also result in regulatory fines and/or increased long-term operational costs. The consumer-facing nature of the industry increases the reputational risks associated with supplier actions. Managing a company’s exposure to environmental and social risks can lead to improved supply chain resiliency and enhanced reputation. Companies can engage with key 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

Ingredient Sourcing

Companies in the Alcoholic Beverages industry source a wide range of ingredients, largely agricultural inputs, from suppliers worldwide. The industry’s ability to source ingredients and at certain price points fluctuates with supply availability, which may be affected by climate change, water scarcity, land management, and other resource scarcity considerations. This exposure can lead to price volatility and can affect company profitability. Ultimately, climate change, water scarcity, and land-use restriction present risks to a company’s long-term ability to source key materials and ingredients. Companies that source ingredients that are more productive, effectively cultivated, and less resource-intensive, or work closely with suppliers to increase their adaptability to climate change and manage exposure to other resource scarcity risks will be better protected from price volatility and/or supply disruptions.

Add Industry

Recommended Next Step: Get access to the full industry standard

You might also be interested in

For Companies

Interested in reporting with SASB Standards? You can get started by viewing our Implementation Primer.

For Investors

See how asset owners and asset managers are using the SASB Standards.

For All

Review current projects for proposed changes to the Standards and give your feedback!