Relevant Issues (4 of 26)
The SASB Standards vary by industry based on the different sustainability risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to impact enterprise value, so they are not included in the Standard. Over time, as the SASB Standards Board continues to receive market feedback, some issues may be added or removed from the Standard. Each company makes their own determination about whether or not a sustainability issue may impact its ability to create enterprise value. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability issues based on their unique business model. Why are some issues greyed out?
- 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
- Ecological Impacts
- Human Rights & Community Relations
- Customer Privacy
- Data Security
- Access & Affordability
- 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
- Labor Practices
- Employee Health & Safety
- 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 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, labor 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.
- Materials Sourcing & Efficiency
- Physical Impacts of Climate Change
Leadership & Governance
- Business Ethics
- Competitive Behavior
- Management of the Legal & Regulatory Environment
- Critical Incident Risk Management
- Systemic Risk Management
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. What is the relationship between General Issue Category and Disclosure Topics?
Disclosure Topics (Industry specific) for:
Household & Personal Products
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Water & Wastewater Management
Water is vital to the Household & Personal Products industry, both as a coolant in manufacturing processes and as a main input for many of the industry’s products. Water is becoming a scarcer resource around the world due to increasing consumption as a result of population growth, rapid urbanization, and reduced supplies due to drought and climate change. Many firms in this industry have operations in regions of the world that are facing water scarcity. Without careful planning, companies could face increased costs or, worse, lose access to water in these regions, thereby presenting a risk to production. Having rigorous checks in place to ensure a steady supply of water to all factories, as well as investing in technology to increase the efficiency of water use, will help firms in this industry keep a lower risk profile as water scarcity becomes a more pressing global issue.
Product Quality & Safety
Product Environmental, Health, and Safety Performance
The Household & Personal Products industry faces growing consumer and regulatory pressure over the use of chemicals of concern, which have been linked to negative environmental externalities and impacts on human health. Some of these chemicals include persistent, bioaccumulative, and toxic (PBT) substances and carcinogenic, mutagen, or teratogenic chemicals, all of which are under increased regulatory scrutiny. Isolating and determining causal channels for negative health and environmental impacts is difficult, which means there is often a significant lag between a product’s introduction to the market and the point at which regulation and/or public opinion causes companies in the industry to reformulate. Directives in the EU and legislation in the U.S. place restrictions on or suggest alternatives to the use of harmful chemicals within the industry. Separately, the U.S. Food & Drug Administration (FDA) in the U.S. may secure greater regulatory power over chemicals used by the cosmetics industry, which would very likely result in higher costs for the Household & Personal Products industry. Large retailers have implemented programs to ban chemicals of concern in the products they sell, which is placing greater pressure on the industry. Companies that are able to anticipate the changing regulatory landscape and implement stricter processes and testing are more likely to gain a competitive advantage. Early adopters of innovations in green chemistry and the reduction of chemicals of concern may improve profitability by being better able to capture changing customer demand and avoiding regulatory burdens.
Product Design & Lifecycle Management
Packaging Lifecycle Management
The Household & Personal Products industry uses a large amount of materials for product packaging, which often constitutes a significant portion of companies’ expenses. In addition, packaging design, particularly packaging weight, has a direct impact on transportation expenses, which can be significant. At the same time, the industry is facing pressure from both consumers and large retail outlets to address the environmental characteristics of its packaging, as material extraction and waste contribute to environmental externalities. The sustainability performance of packaging depends largely on the type, use, and ultimate disposal of materials. However, companies that effectively manage the sustainability characteristics of their product packaging—including light-weighting of materials, the use of recycled content and recyclable materials, and the use of sustainably sourced materials—may be better positioned to capture shifting consumer demand and avoid (or mitigate the impacts of) regulation related to extended producer responsibility. By managing the sustainability of product packaging, companies can also potentially reduce input and transportation costs.
Supply Chain Management
Environmental & Social Impacts of Palm Oil Supply Chain
Palm oil has rapidly risen in popularity as a cheap input for a wide range of goods in the Household & Personal Products industry, including cleaning products, candles, and cosmetics. Palm oil harvesting in specific regions of the world can contribute to deforestation, GHG emissions, and other environmental and social problems. If not sourced responsibly, palm oil materials contribute to environmental and social externalities that can present reputational and regulatory risks for companies. Further, companies in this industry are exposed to the risk of supply chain disruptions, input price increases, and reputational damage associated with environmental and social externalities from palm oil sourcing. Thus, companies face pressure to track and responsibly source palm oil. Additionally, they face pressure to ensure minimum standards for working conditions in the supply chain, as the production of palm oil is often associated with labor issues. Implementing sourcing standards can contribute to reducing risks, as can innovations at the product-design phase to reduce dependence on controversial materials such as palm oil.
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