Relevant Issues (5 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 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.
- Water & Wastewater Management
- Waste & Hazardous Materials Management
- Ecological Impacts
- Human Rights & Community Relations
- Customer Privacy The category addresses management of risks related to the use of personally identifiable information (PII) and other customer or user data for secondary purposes including but not limited to marketing through affiliates and non-affiliates. The scope of the category includes social issues that may arise from a company’s approach to collecting data, obtaining consent (e.g., opt-in policies), managing user and customer expectations regarding how their data is used, and managing evolving regulation. It excludes social issues arising from cybersecurity risks, which are covered in a separate category.
- Data Security The category addresses management of risks related to collection, retention, and use of sensitive, confidential, and/or proprietary customer or user data. It includes social issues that may arise from incidents such as data breaches in which personally identifiable information (PII) and other user or customer data may be exposed. It addresses a company’s strategy, policies, and practices related to IT infrastructure, staff training, record keeping, cooperation with law enforcement, and other mechanisms used to ensure security of customer or user data.
- Access & Affordability
- Product Quality & Safety
- Customer Welfare
- Selling Practices & Product Labeling
- Labor Practices
- Employee Health & Safety
- Employee Engagement, Diversity & Inclusion The category addresses a company’s ability to ensure that its culture and hiring and promotion practices embrace the building of a diverse and inclusive workforce that reflects the makeup of local talent pools and its customer base. It addresses the issues of discriminatory practices on the bases of race, gender, ethnicity, religion, sexual orientation, and other factors.
Business Model & Innovation
- Product Design & Lifecycle Management
- Business Model Resilience
- Supply Chain Management
- Materials Sourcing & Efficiency
- Physical Impacts of Climate Change
Leadership & Governance
- Business Ethics
- Competitive Behavior 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).
- 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:
Internet Media & Services
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Environmental Footprint of Hardware Infrastructure
With the Internet & Media Services industry providing a growing amount of content and service offerings, companies in this industry increasingly own, operate, or rent more data centers and other hardware. Thus, the management of the energy and water use associated with IT hardware infrastructure is of great importance to shareholder value. Data centers need to be powered continuously. Disruptions to the energy supply can have a material impact on operations, depending on the magnitude and timing of the disruption. Companies face a trade-off between energy and water consumption due to data center cooling needs. Cooling data centers with water instead of chillers is a means of improving energy efficiency, but it can lead to dependence on significant local water resources. Decisions about data center specifications are important for managing costs, obtaining a reliable supply of energy and water, and lowering reputational risks, particularly as there is an increasing global regulatory focus on climate change and as opportunities arise from innovations in energy efficiency and renewable energy.
Data Privacy, Advertising Standards & Freedom of Expression
Companies in the Internet & Media Services industry rely on customer data to innovate new tools and services, generate revenues through advertising sales, and track and prevent criminal activities, such as hacking and online predators targeting children. However, the use and storage of a wide range of customer data, such as personal, demographic, content, and behavioral data, raises privacy concerns, leading to increased regulatory scrutiny in many countries around the world. Companies face reputational risks from providing access to user data to governments, which raises concerns that the data may be used to limit the freedoms of citizens. Companies may also face increased costs of compliance associated with the varying local laws or government demands related to censorship of culturally or politically sensitive material on websites. This issue has impacts on company profitability through the loss of users and can influence decisions to enter or operate in certain markets.
Companies in the Internet Media & Services industry are subject to a large and growing number of cyber attacks and social engineering threats, which puts customer information and a company's own data at risk. Inadequate prevention, detection, and remediation of data security threats can influence customer acquisition and retention and result in decreased market share and lower demand for the company’s products and/or services. By identifying and addressing data security threats in a timely manner companies can protect brand value and will be better positioned for customer acquisition and retention. Furthermore, effective management can avoid significant expenses associated with data breaches—most commonly directed at recapturing users following a breach.
Employee Engagement, Diversity & Inclusion
Employee Recruitment, Inclusion & Performance
Employees are key contributors to value creation in the Internet Media & Services industry. While the number of job openings in the industry continues to grow, companies are finding it difficult to recruit qualified employees to fill these positions. The shortage in technically skilled domestic employees has created intense competition to acquire highly skilled employees, contributing to high employee turnover rates. In response to talent shortages, companies are hiring foreign nationals, which creates risks related to perceived social implications in the host and home countries of workers. Companies offer significant monetary and non-monetary benefits in order to improve employee engagement and, therefore, retention and productivity increase. Initiatives to improve employee engagement and work-life balance might influence the recruitment and retention of a diverse workforce. As the industry is characterized by relatively low representation from women and minority groups, efforts to recruit from and develop diverse talent pools can serve to address the talent shortage and generally to improve the value of company offerings. Greater workforce diversity is important for innovation, and it helps companies understand the needs of their diverse and global customer base.
Intellectual Property Protection & Competitive Behavior
Despite the openness of the Internet, companies in the Internet Media & Services industry spend a significant proportion of their revenues on intellectual property (IP) protection, including acquiring patents and copyrights. While IP protection is inherent to the business model of some companies in the industry and is an important driver of innovation, the IP practices of companies can be a contentious societal issue. Companies could sometimes acquire patents and other IP protection to restrict competition and access to benefits from innovation, particularly if they are dominant market players. Due to the complexity of software, its abstract nature, and increasing IP rights protection related to software, Internet Media & Services companies have to navigate overlapping patent claims to be able to operate. As a result, companies in the industry may find themselves constantly in litigation or subject to regulatory scrutiny either due to allegations of patent violations if they engage in unethical business practices, or are perceived as doing so, or because they are suing others for IP infringement. Adverse legal or regulatory rulings related to antitrust and IP can expose internet media and services companies to costly and lengthy litigations and potential monetary losses as a result. Such rulings may also affect a company’s market share and pricing power if its patents or dominant position in key markets are legally challenged, with significant impact on revenue. Therefore, companies that can balance the protection of their IP and its use to spur innovation with ensuring their IP management and other business practices do not unfairly restrict competition, have the potential to lower regulatory scrutiny and legal actions while protecting their market value.
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