Relevant Issues (3 of 26)
Why are some issues greyed out?The SASB Standards vary by industry based on the different sustainability-related risks and opportunities within an industry. The issues in grey were not identified during the standard-setting process as the most likely to be useful to investors, so they are not included in the Standard. Over time, as the ISSB continues to receive market feedback, some issues may be added or removed from the Standard. Each company determines which sustainability-related risks and opportunities are relevant to its business. The Standard is designed for the typical company in an industry, but individual companies may choose to report on different sustainability-related risks and opportunities based on their unique business model.
- GHG Emissions
- Air Quality
- Energy Management
- Water & Wastewater Management
- Waste & Hazardous Materials Management
- Ecological Impacts
- Human Rights & Community Relations
- Customer Privacy
- Data Security
Access & AffordabilityThe category addresses a company’s ability to ensure broad access to its products and services, specifically in the context of underserved markets and/or population groups. It includes the management of issues related to universal needs, such as the accessibility and affordability of health care, financial services, utilities, education, and telecommunications.
- Product Quality & Safety
- Customer Welfare
- Selling Practices & Product Labeling
- Labor Practices
- Employee Health & Safety
- Employee Engagement, Diversity & Inclusion
Business Model and Innovation
- Product Design & Lifecycle Management
Business Model ResilienceThe category addresses an industry’s capacity to manage risks and opportunities associated with incorporating social, environmental, and political transitions into long-term business model planning. This includes responsiveness to the transition to a low-carbon and climate-constrained economy, as well as growth and creation of new markets among unserved and underserved socio-economic populations. The category highlights industries in which evolving environmental and social realities may challenge companies to fundamentally adapt or may put their business models at risk.
- Supply Chain Management
- Materials Sourcing & Efficiency
- Physical Impacts of Climate Change
Leadership and Governance
- Business Ethics
- Competitive Behavior
- Management of the Legal & Regulatory Environment
Critical Incident Risk ManagementThe category addresses the company’s use of management systems and scenario planning to identify, understand, and prevent or minimize the occurrence of low-probability, high-impact accidents and emergencies with significant potential environmental and social externalities. It relates to the culture of safety at a company, its relevant safety management systems and technological controls, the potential human, environmental, and social implications of such events occurring, and the long-term effects to an organization, its workers, and society should these events occur.
- Systemic Risk Management
Disclosure Topics (Industry specific) for: Gas Utilities & Distributors
A de facto objective of regulated gas utilities is to deliver natural gas to customers in a safe, reliable, and environmentally responsible manner. Entities in the industry are tasked with managing these potentially competing priorities to maintain favourable relations with customers and regulators—and ultimately to earn appropriate returns for shareholders. The affordability of energy, from the utility customer perspective, is particularly challenging to balance, as it often conflicts with other core objectives. Utility energy bills are widely perceived to be increasingly more expensive for low income customers (affordability is determined by both the net cost of energy bills and the underlying economics of customers). Playing a role in ensuring that utility bills are affordable is crucial for utilities in building trust (intangible asset value) with regulators and customers. Quality of regulatory relations is a key value driver for utilities, and one of the more closely analysed issues by investment analysts. Regulators’ willingness, or lack thereof, to grant rate requests, rate structure modifications, cost recovery, and allowed returns is a primary determinant of financial performance and investment risk. Effectively managing affordability may give utilities the opportunity to invest more capital, favourably revise rate structures, and increase allowed returns. Furthermore, utilities that do not effectively manage affordability are increasingly exposed to customers obtaining energy supplies from means other than natural gas (or reducing energy needs) by pursuing alternative energy sources (e.g., industrial customers’ use of combined heat and power). Managing affordability involves operating an efficient business with a well-thought-out, long-term perspective and strategy, as well as working closely with regulators and public policymakers on rate structures and, potentially, bill-assistance programs. While the precise nature of financial impacts of affordability are largely determined by utility business models and rate structures, affordability is a critical business issue for utilities to manage in terms of maintaining (and growing) customer bases, building intangible asset value, creating investment and return opportunities, and ultimately delivering shareholder returns.
Natural gas produces fewer greenhouse gas (GHG) emissions than other fossil fuels. Expanding its use in the economy may be an important strategy for many governments and regulators striving to reduce GHG emissions. However, despite the relatively lower emissions, the natural gas value chain still produces meaningful levels of GHG emissions overall. As policymakers and regulators seek to mitigate climate change, the efficient consumption of natural gas will be an important long-term theme. Energy efficiency is a low-lifecycle-cost method to reduce greenhouse gas (GHG) emissions. Utilities can offer customers a wide range of options to promote energy efficiency, including providing rebates for energy-efficient appliances, weatherising customers’ homes and educating customers on energy saving methods. Overall, entities that sponsor efficiency initiatives may reduce the downside risks from demand fluctuations, gain returns on needed investments, decrease operating costs and earn higher risk-adjusted returns over the long term.
Integrity of Gas Delivery Infrastructure
Operating a vast network of gas pipelines, equipment and storage facilities requires a multifaceted, long-term approach to ensuring infrastructure integrity and managing related risks. Although customers depend on reliable gas supplies, entities manage substantial risks—including those related to human health, property and greenhouse gas (GHG) emissions—that result from operating gas distribution networks and related infrastructure. Ageing infrastructure, inadequate monitoring and maintenance, and other operational factors may result in gas leaks. Gas leak safety-related risks, such as losses of containment, may result in fires or explosions that can be particularly dangerous in urban areas where entities often operate. Furthermore, gas leaks also result in fugitive emissions (methane), causing adverse environmental impacts. Regulated gas utilities generally incur no direct costs for gas leaks, because the cost of gas typically is passed on to customers (though this may vary by region). However, gas leaks that result in safety-related risks or fugitive emissions may affect entities financially through a variety of regulatory, legal and product demand channels. Accidents, particularly fatal accidents, may result in negligence claims against entities, leading to costly court battles and fines. GHG emissions may result in increased regulatory scrutiny—a critical element directly connected to financial performance, given the importance of regulatory relations—and potential fines and penalties. Importantly, regulated gas utilities can financially benefit from capital investment opportunities to improve performance and mitigate risks related to safety and emissions, which can be factored into their rate base. Entities manage such risks through pipeline replacements, regular inspections and monitoring, employee training and emergency preparedness, investments in technology, and other strategies such as working closely with regulators. In response to concerns about ageing infrastructure, many entities are seeking ways to expedite the replacement permitting and approval process, especially in cases where pipelines are located near densely populated areas.