Relevant Issues (4 of 26)
Why are some issues greyed out?
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.-
Environment
- GHG Emissions
- Air Quality
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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. -
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
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Social Capital
- Human Rights & Community Relations
- Customer Privacy
- Data Security
- Access & Affordability
- Product Quality & Safety
- Customer Welfare
- Selling Practices & Product Labeling
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Human Capital
- Labor Practices
- Employee Health & Safety
- Employee Engagement, Diversity & Inclusion
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Business Model & Innovation
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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. - Business Model Resilience
- Supply Chain Management
- Materials Sourcing & Efficiency
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Physical Impacts of Climate Change
The category addresses the company’s ability to manage risks and opportunities associated with direct exposure of its owned or controlled assets and operations to actual or potential physical impacts of climate change. It captures environmental and social issues that may arise from operational disruptions due to physical impacts of climate change. It further captures socio-economic issues resulting from companies failing to incorporate climate change consideration in products and services sold, such as insurance policies and mortgages. The category relates to the company's ability to adapt to increased frequency and severity of extreme weather, shifting climate, sea level risk, and other expected physical impacts of climate change. Management may involve enhancing resiliency of physical assets and/or surrounding infrastructure as well as incorporation of climate change-related considerations into key business activities (e.g., mortgage and insurance underwriting, planning and development of real estate projects).
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Leadership & Governance
- Business Ethics
- Competitive Behavior
- Management of the Legal & Regulatory Environment
- Critical Incident Risk Management
- Systemic Risk Management
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.
General Issue Category
(Industry agnostic)
(Industry agnostic)
Disclosure Topics (Industry specific) for: Real Estate
Energy Management
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Energy Management
Real estate assets consume significant amounts of energy, primarily related to space heating, ventilating, air conditioning, water heating, lighting, and the use of equipment and appliances. The type of energy used, magnitude of consumption, and strategies for energy management are highly dependent on the real estate asset class, among other factors. Generally, grid electricity consumption is the predominant form of consumed energy, though on-site fuel combustion and renewable energy production also serve an important roles. Energy costs may be borne by companies in the industry and/or the property occupants; either way, energy management is a significant industry issue. To the extent that the real estate owner assumes direct responsibility for energy costs, such costs often represent significant operating costs, inherently indicating the importance of energy management. Energy pricing volatility and a general trend of electricity price increases, energy-related regulations, wide variations in energy performance across the existing building stock, and opportunities for efficiency improvements through economically attractive capital investments all further point to the importance of energy management. Energy costs assumed by occupants, either in whole or in part, are nonetheless likely to significantly impact companies in the industry, albeit through differing channels. Building energy performance is a notable driver of tenant demand, as it allows them to control operating costs, mitigate the environmental impacts of operations, and, often just as importantly, maintain a reputation for resource conservation. Additionally, real estate owners may be exposed to energy-related regulations even when energy costs are the responsibility of occupants. Overall, companies in the industry that effectively manage the energy performance of their assets may see reduced operating costs and regulatory risks, as well as increased tenant demand, rental rates, and occupancy rates—all of which drive revenue and asset value appreciation. Improving the energy performance of assets is highly dependent on property type and location, target tenant market, local building codes, physical and legal opportunities to deploy distributed renewable energy, ability to measure consumption, and performance of existing building stock, among other factors.
Water & Wastewater Management
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Water Management
Buildings consume significant amounts of water in their operations, through water fixtures, building equipment, appliances, and irrigation. Operating costs resulting from water consumption may represent significant costs depending on property type, tenant operations, geographical locations, and other factors. Companies in the industry can be responsible for a building’s water costs, or common area water costs, though it is common to allocate all, or a portion, of these costs to occupants. In these arrangements, water management continues to play an important role through tenant demand and regulatory exposure. Tenants may assess the water efficiency of real estate assets in an effort to control operating costs, mitigate environmental impacts of operations, and, often just as importantly, develop a reputation for resource conservation. Additionally, real estate owners may be exposed to water-related regulations even when water costs are the responsibility of occupants. Overall, companies in the industry that effectively manage water efficiency of assets, even when they don’t face direct exposure to water costs, may see reduced operating costs and regulatory exposure, as well as increased tenant demand, rental rates, and occupancy rates—all of which drive revenue and asset value appreciation. Long-term historic increases in the costs of water—and expectations of continued increases due to overconsumption and constrained supplies resulting from population growth and shifts, pollution, and climate change—indicate the heightened importance of water management. The ability to improve asset water efficiency is highly dependent on the property type, locational water availability, target tenant market, local building codes, the ability to measure consumption, and the level of current efficiency of existing building stock, among other factors.
Product Design & Lifecycle Management
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Management of Tenant Sustainability Impacts
Real estate assets generate significant sustainability impacts, including resource consumption—namely energy and water—waste generation, and impacts on occupant health through indoor environmental quality. While companies in the industry own real estate assets, it is the tenant operations of such assets that is a dominant driver of sustainability impacts produced by the built environment. Tenants may design and construct leased spaces according to their operating needs. In turn, their operations consume significant amounts of energy and water, generate waste, and impact the health of those living, working, shopping, or visiting the properties. While these sustainability impacts are often generated by tenant operations and activities, real estate owners have an important role in influencing tenant sustainability impacts. The manner in which companies in the industry structure their agreements, contracts, and relationships with tenants is instrumental in effectively managing the sustainability impacts of their tenants, and ultimately, the impacts of their assets. Managing tenant sustainability impacts may include mitigating the problem of split incentives by aligning both parties’ financial interests with sustainability outcomes, establishing systematic measurement and communication of resource consumption data, creating shared performance goals, and mandating minimum sustainability performance or design requirements, among other strategies. Effective management of tenant sustainability impacts, particularly related to energy, water, and indoor environmental quality, may drive asset value appreciation, increase tenant demand and satisfaction, decrease direct operating costs, and/or decrease risks related to building codes and regulations.
Physical Impacts of Climate Change
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Climate Change Adaptation
Climate change affects companies in the industry via frequent or high-impact extreme weather events and changing climate patterns. The manner in which a company’s business model is structured to incorporate ongoing assessments of climate change risks, and the adaptation to such risks, is likely to be increasingly connected to company value over the long term. More specifically, investment strategies with assets located on floodplains and in coastal regions that are exposed to inclement weather may have increased needs around risk mitigation and business model adaptation to climate change over the long term. These strategies are especially important in light of the long-term challenges associated with flood insurance rates, the financial stability of government-subsidized flood insurance programs, and financing stipulations or other creditor concerns. Besides insurance, other risk mitigation measures include improvements to physical asset resiliency and lease terms that transfer risk to tenants, although these measures can create their own costs and risks for real estate companies. To ensure long-term growth and protection of shareholder value, companies need to implement climate change adaptation strategies that are comprehensive, account for trade-offs between various risk mitigation strategies, and integrate consideration of all projected costs and benefits over the long term.