Relevant Issues (6 of 26)
- GHG Emissions
- Air Quality
- Energy Management
- 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.
- 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.
- Ecological Impacts
- Human Rights & Community Relations
- Customer Privacy
- Data Security
- Access & Affordability
- Product Quality & Safety
- Customer Welfare
- Selling Practices & Product Labeling
- Labor Practices The category addresses the company’s ability to uphold commonly accepted labor standards in the workplace, including compliance with labor laws and internationally accepted norms and standards. This includes, but is not limited to, ensuring basic human rights related to child labor, forced or bonded labor, exploitative labor, 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 labor and freedom of association.
- 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
Business Model & Innovation
- 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
- 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
Leadership & Governance
- Business Ethics
- Competitive Behavior
- Management of the Legal & Regulatory Environment
- Critical Incident Risk Management
- Systemic Risk Management
Disclosure Topics (industry specific) for:
Electronic Manufacturing Services & Original Design Manufacturing
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Water & Wastewater Management
The manufacturing of computers, computer components, and other electronics requires significant volumes of water. Water is becoming a scarce resource around the globe, due to increasing consumption from population growth and rapid urbanization, and reduced supplies due to climate change. Without careful planning, water scarcity can result in higher supply costs, social tensions with local communities and governments, and/or loss of access to water in water-scarce regions thereby presenting a critical risk to production, and thus revenues. Electronic Manufacturing Services (EMS) & Original Design Manufacturing (ODM) companies that are able to increase the efficiency of water use during manufacturing can reduce operating costs and maintain a lower risk profile, ultimately impacting cost of capital and market valuation. Furthermore, firms that prioritize reducing water use and greater efficiency can face lower regulatory risks as local, regional, and national environmental laws place increasing emphasis on resource conservation.
Waste & Hazardous Materials Management
The manufacturing of computers, computer components, and other electronics requires significant volumes of chemicals and generates air and water emissions and solid waste, including hazardous substances. The handling and disposal of hazardous wastes produced during manufacturing can lead to increased operating costs, capital expenditures, and in some instances, increased compliance costs or regulatory fines and penalties. Companies in the Electronic Manufacturing Services (EMS) & Original Design Manufacturing (ODM) industry that are able to reduce waste produced during manufacturing and ensure that it is reused, recycled, or disposed of appropriately, are likely to maintain a lower risk profile and face lower regulatory risks as local, regional and national environmental laws place increasing emphasis on resource conservation and waste management.
Electronic Manufacturing Services (EMS) & Original Design Manufacturing (ODM) companies operate in a highly competitive environment based on cost and therefore are highly sensitive to labor costs and risks. Additionally, companies are commonly required to meet tight production deadlines for big-ticket product launches by hardware companies. Combined, these factors escalate the importance of companies maintaining strong relations with the labor force. Absent such, companies can be exposed to work stoppages and production disruptions. Such disruptions can lead to reduced revenue in the near term, as well as possible long-term impacts on productivity due to dampened employee morale. In addition to protecting a company’s reputation and social license to operate, improvements in labor practices can mitigate production disruptions.
Employee Health & Safety
The treatment of workers and the protection of worker rights in the Electronic Manufacturing Services (EMS) & Original Design Manufacturing (ODM) industry is of growing concern among customers, regulators, and leading companies. Critical aspects of this issue working conditions, environmental responsibility, and workforce health and safety—particularly as it relates to the hazardous materials and potentially dangerous equipment used in manufacturing. Companies in this industry operate in a highly competitive environment based on cost and therefore rely heavily on securing low-cost and contract labor. The industry’s reliance on subcontractors, labor recruitment firms, and a multi-=-tiered system of suppliers can make it difficult to improve performance on the issue. Further, companies are often located in countries with relatively low direct costs and have varying degrees of regulation and enforcement for protecting workers. This dynamic can heighten a company’s exposure to reputational risks and impacts on short- and long-term costs and sales. Such effects can arise from increasing regulation and its enforcement in response to high-profile safety or labor incidents, or through a shift in demand away from companies associated with such incidents. Companies with strong supply-chain standards, monitoring, and engagement with suppliers to address labor concerns may therefore be better positioned to protect shareholder value over the long term.
Product Design & Lifecycle Management
Product Lifecycle Management
Companies in the Electronic Manufacturing Services (EMS) & Original Design Manufacturing (ODM) industry, along with the industry’s customers such as hardware companies, face increasing challenges associated with environmental externalities attributed to product manufacturing, transport, use, and disposal. Rapid obsolescence of hardware products exacerbates such externalities. The industry’s products commonly contain hazardous materials, making safe end-of-life disposal a critical aspect to manage. Companies unable to minimize the environmental externalities of their products may face increased regulatory costs as local, regional, and national environmental laws place increasing emphasis on resource conservation and waste management. Through product innovation that facilitates end-of-life product recovery and the use of less-impactful materials, EMS & ODM manufacturers can achieve improvements in lifecycle impacts, reduce regulatory risk, and realize cost savings.
Materials Sourcing & Efficiency
Companies in the Electronic Manufacturing Services (EMS) & Original Design Manufacturing (ODM) industry rely on numerous critical materials as key inputs for finished products. Many of these inputs have few or no available substitutes and are often sourced from deposits concentrated in few countries, many of which are subject to geopolitical uncertainty. Other sustainability impacts related to 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 due to growing global demand from other sectors can result in price increases and supply risks. The ability of companies to manage potential materials shortages, supply disruptions, price volatility, and reputational risks is made more difficult by the fact that they commonly source materials from supply chains that often lack transparency. Failure to effectively manage this issue can lead to an inability to access necessary materials, reduced margins, constrained revenue growth, and/or higher costs or capital.
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