Disclosure Guidance for Integrated Companies in the Technology & Communications Sector

Transcription

1 Disclosure Guidance for Integrated Companies in the Technology & Communications Sector Technical Bulletin Prepared by the Sustainability Accounting Standards Board April SASB

2 Disclosure Guidance for Integrated Companies in the Technology & Communications Sector Technical Bulletin About SASB The Sustainability Accounting Standards Board (SASB) provides sustainability accounting standards for use by publicly-listed corporations in the U.S. in disclosing material sustainability issues for the benefit of investors and the public. SASB standards are designed for disclosure in mandatory filings to the Securities and Exchange Commission (SEC), such as the Form 10-K and 20-F. SASB is an independent 501(c)3 non-profit organization and is accredited to set standards by the American National Standards Institute (ANSI). SASB is developing standards for more than 80 industries in 10 sectors. SASB s standards-setting process includes evidence-based analysis with in-depth industry research and engagement with a broad range of stakeholders. The end result of this process is the creation of a complete, industry-specific accounting standard which accurately reflects the issues likely to be material for each industry. Sustainability Accounting Standards Board 75 Broadway, Suite 202 San Francisco, CA info@sasb.org SASB Legal Publications Disclaimer: The content made available in this publication is copyrighted by the Sustainability Accounting Standards Board. All rights reserved. You agree to only use the content made available to you for non-commercial, informational or scholarly use within the organization you indicated you represent and to keep intact all copyright and other proprietary notices related to the content. The content made available to you may not be further disseminated, distributed, republished, or reproduced, in any form or in any way, outside your organization without the prior written permission of the Sustainability Accounting Standards Board. To request permission, please contact us at info@sasb.org SASB TM TECHNICAL BULLETIN 1

3 Disclosure Guidance for Integrated Companies in the Technology & Communications Sector Introduction SASB develops sustainability accounting standards specific to each industry as categorized by the Sustainable Industry Classification System (SICS ). However, in certain sectors, including the Technology & Communications sector, many firms have some degree of horizontal or vertical integration, and are therefore exposed to sustainability risks and opportunities associated with multiple industries. Designed for Technology & Communications companies with operations in multiple industries and for Hardware companies with owned manufacturing operations, this bulletin discusses the additional disclosures that companies should consider, to allow investors to understand the full extent of sustainability risks and opportunities. Disclosure Guidance SASB recommends that integrated companies use the following framework in determining SASB topics and metrics for disclosure. Horizontal Integration: Revenue or Market Share Threshold For Technology & Communications companies who conduct operations in multiple SICS industries, a revenue or market share threshold should be used to determine disclosure requirements, as follows: A company should disclose on material sustainability topics for each industry from which it generates 15% or more of its revenue. A company should disclose on material sustainability topics for each industry where it is among the top five companies in terms of market share (by revenue), even if the industry represents less than 15% of its revenue. Vertical Integration: Special Considerations for the Hardware and Semiconductors Industries In developing sustainability accounting standards for a specific industry, SASB focuses on the scope of activities of typical companies in such industries, including their involvement in manufacturing activities. Such typical scope of activity is described in the Standards Industry Description. To the extent that a registrant has a different scope of activities, certain disclosure topics and accounting metrics may become more or less relevant SASB TM TECHNICAL BULLETIN 2

4 Special Consideration for Hardware Companies The SASB Hardware Standard was developed on the model of companies that do not integrate manufacturing activities. To the extent that a hardware company integrates manufacturing activities in its own operations, it should disclose on certain material sustainability topics presented in the Electronic Manufacturing Services & Original Design Manufacturing (EMS & ODM) Standard that pertain to hardware manufacturing. Table 1 lists manufacturing-related topics and metrics for the Hardware industry. Further guidance and technical protocols for such disclosure are provided under the same topics in the SASB EMS & ODM Standard. Activity metrics for the Hardware industry, as outlined in the Hardware Standard, should be used to provide context behind performance of hardware companies on manufacturing-related sustainability topics. Table 1. Manufacturing-related Sustainability Topics & Accounting Metrics for Hardware Companies Topic Accounting Metric Category Unit of Measure Code Water & Waste Manufacturing 1 Total water withdrawn, percentage recycled, percentage in regions with High or Extremely High Baseline Water Stress Amount of hazardous waste from manufacturing, percentage recycled Cubic meters (m 3 ), Tons (t), TC TC (1) Total Recordable Injury Rate and (2) Near Miss Frequency Rate for (a) full time employees and (b) contract employees Rate TC Number and total duration of work stoppages 4 Number, Worker days TC Fair Labor Practices 2,3 of (a) facilities and (b) suppliers facilities audited in the EICC Validated Audit Process (VAP) or to an equivalent social and environmental responsibility code of conduct of facilities TC Social and environmental responsibility audit compliance for (a) registrant and (b) suppliers: (1) priority non-conformance rate and associated corrective action rate, and (2) other non-conformances rate and associated corrective action rate Rate in number per facility TC The manufacturing-related metrics (TC and TC ) for Water & Waste Manufacturing are presented in the EMS & ODM Standard (TC0101), and therefore reflect the numbering of the EMS & ODM metrics. The registrant should refer to the EMS & ODM Standard for the detailed technical protocols outlining disclosure requirements. 2 The manufacturing-related metrics (TC though TC ) for Fair Labor Practices are presented in the EMS & ODM Standard (TC0101), and therefore reflect the numbering of the EMS & ODM metrics. The registrant should refer to the EMS & ODM Standard for the detailed technical protocols outlining disclosure requirements. 3 In metrics TC and TC , the registrant should focus disclosure on its own facilities and operations, as the supplier audit, compliance, and corrective action rates are reported under Supply Chain Management & Materials Sourcing in the Hardware Standard. 4 Note to TC Disclosure shall include a description of the reason for the work stoppage, the impact on production, and any corrective actions taken SASB TM TECHNICAL BULLETIN 3

5 Special Consideration for Semiconductor Companies The SASB Semiconductors Standard was developed on the model of companies that integrate manufacturing activities. To the extent that a semiconductor company does not integrate manufacturing activities, it need not disclose on sustainability topics that pertain to semiconductor manufacturing. Table 2 lists manufacturingrelated topics for the Semiconductors industry, which are included in the Semiconductors Standard, but which may not be relevant for a fabless semiconductor company. Activity metrics for the Semiconductors industry, as outlined in the Semiconductors Standard, should be used to provide context behind performance of semiconductor companies on manufacturing-related sustainability topics. Table 2. Manufacturing-related Sustainability Topics & Accounting Metrics for Semiconductor Companies Topic Accounting Metric Category Unit of Measure Code Greenhouse Gas Emissions Gross global Scope 1 emissions and amount of total emissions from perfluorocompounds (PFCs) Description of long-term and short-term strategy or plan to manage Scope 1 emissions, including emissions reduction targets, and an analysis of performance against those targets Discussion and Analysis Metric tons CO2-e n/a TC TC Energy Manufacturing Total energy consumed, percentage grid electricity, percentage renewable energy Gigajoules, TC Water & Waste Manufacturing Total water withdrawn, percentage recycled, percentage in regions with High or Extremely High Baseline Water Stress Amount of hazardous waste from manufacturing, percentage recycled Cubic meters (m 3 ), Tons (t), TC TC Employee Health & Safety Discussion of efforts to assess, monitor, and reduce exposure of employees to human health hazards Amount of legal and regulatory fines and settlements associated with employee health and safety violations 5 Discussion and Analysis n/a U.S. dollars ($) TC TC Note to TC Disclosure shall include a description of fines and settlements and corrective actions implemented in response to events SASB TM TECHNICAL BULLETIN 4