CONSUMER GOODS SECTOR

APPLIANCE MANUFACTURING
Sustainability Accounting Standard

Sustainable Industry Classification System® (SICS®) CG-AM

Prepared by the
Sustainability Accounting Standards Board

October 2018

INDUSTRY STANDARD | VERSION 2018-10

© 2022 The IFRS Foundation. All Rights Reserved. sasb.org

APPLIANCE MANUFACTURING
Sustainability Accounting Standard
As of August 2022, the International Sustainability Standards Board (ISSB) of the IFRS Foundation assumed
responsibility for the SASB Standards. The ISSB has committed to build on the industry-based SASB Standards
and leverage SASB’s industry-based approach to standards development. The ISSB encourages preparers
and investors to continue to provide full support for and to use the SASB Standards until IFRS Sustainability
Disclosure Standards replace SASB Standards.

Historical Information About the SASB Foundation

These materials were developed under the auspices of the SASB Foundation. The SASB Foundation was founded in 2011
as a not-for-profit, independent standards-setting organization. The SASB Foundation’s mission was to establish and
maintain industry-specific standards that assist companies in disclosing financially material, decision-useful sustainability
information to investors. The SASB Foundation operated in a governance structure similar to the structure adopted by other
internationally recognized bodies that set standards for disclosure to investors, including the Financial Accounting Standards
Board (FASB) and the International Accounting Standards Board (IASB). This structure included a board of directors (“the
Foundation Board”) and a standards-setting board (“the Standards Board” or “the SASB”). The Standards Board developed,
issued, and maintained the SASB Standards. The Foundation Board oversaw the strategy, finances, and operations of
the entire organization, and appointed the members of the Standards Board. The Foundation Board was not involved in
setting standards, but was responsible for overseeing the Standards Board’s compliance with the organization’s due process
requirements. As set out in the SASB Rules of Procedure, the SASB’s standards-setting activities were transparent and
followed careful due process, including extensive consultation with companies, investors, and relevant experts. The SASB
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well as through the sale and licensing of publications, educational materials, and other products.

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Table of Contents
Introduction....................................................................................................................................................................4
Purpose of SASB Standards.........................................................................................................................................4
Overview of SASB Standards.......................................................................................................................................4
Use of the Standards...................................................................................................................................................5
Industry Description.....................................................................................................................................................5

Sustainability Disclosure Topics & Accounting Metrics...............................................................................................6

Product Safety.............................................................................................................................................................7
Product Lifecycle Environmental Impacts....................................................................................................................10

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INTRODUCTION

Purpose of SASB Standards

The SASB’s use of the term “sustainability” refers to corporate activities that maintain or enhance the ability of the
company to create value over the long term. Sustainability accounting reflects the governance and management of a
company’s environmental and social impacts arising from production of goods and services, as well as its governance and
management of the environmental and social capitals necessary to create long-term value. The SASB also refers to
sustainability as “ESG” (environmental, social, and governance), though traditional corporate governance issues such as
board composition are not included within the scope of the SASB’s standards-setting activities.

SASB standards are designed to identify a minimum set of sustainability issues most likely to impact the operating
performance or financial condition of the typical company in an industry, regardless of location. SASB standards are
designed to enable communications on corporate performance on industry-level sustainability issues in a cost-effective
and decision-useful manner using existing disclosure and reporting mechanisms.

Businesses can use the SASB standards to better identify, manage, and communicate to investors sustainability
information that is financially material. Use of the standards can benefit businesses by improving transparency, risk
management, and performance. SASB standards can help investors by encouraging reporting that is comparable,
consistent, and financially material, thereby enabling investors to make better investment and voting decisions.

Overview of SASB Standards

The SASB has developed a set of 77 industry-specific sustainability accounting standards (“SASB standards” or “industry
standards”), categorized pursuant to SASB’s Sustainable Industry Classification System® (SICS®). Each SASB standard
describes the industry that is the subject of the standard, including any assumptions about the predominant business
model and industry segments that are included. SASB standards include:

1. Disclosure topics – A minimum set of industry-specific disclosure topics reasonably likely to constitute material
information, and a brief description of how management or mismanagement of each topic may affect value creation.

2. Accounting metrics – A set of quantitative and/or qualitative accounting metrics intended to measure performance
on each topic.

3. Technical protocols – Each accounting metric is accompanied by a technical protocol that provides guidance on
definitions, scope, implementation, compilation, and presentation, all of which are intended to constitute suitable criteria
for third-party assurance.

4. Activity metrics – A set of metrics that quantify the scale of a company’s business and are intended for use in
conjunction with accounting metrics to normalize data and facilitate comparison.

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Furthermore, the SASB Standards Application Guidance establishes guidance applicable to the use of all industry
standards and is considered part of the standards. Unless otherwise specified in the technical protocols contained in the
industry standards, the guidance in the SASB Standards Application Guidance applies to the definitions, scope,
implementation, compilation, and presentation of the metrics in the industry standards.

The SASB Conceptual Framework sets out the basic concepts, principles, definitions, and objectives that guide the
Standards Board in its approach to setting standards for sustainability accounting. The SASB Rules of Procedure is focused
on the governance processes and practices for standards setting.

Use of the Standards

SASB standards are intended for use in communications to investors regarding sustainability issues that are likely to
impact corporate ability to create value over the long term. Use of SASB standards is voluntary. A company determines
which standard(s) is relevant to the company, which disclosure topics are financially material to its business, and which
associated metrics to report, taking relevant legal requirements into account1. In general, a company would use the SASB
standard specific to its primary industry as identified in SICS® . However, companies with substantial business in multiple
SICS® industries can consider reporting on these additional SASB industry standards.

It is up to a company to determine the means by which it reports SASB information to investors. One benefit of using
SASB standards may be achieving regulatory compliance in some markets. Other investor communications using SASB
information could be sustainability reports, integrated reports, websites, or annual reports to shareholders. There is no
guarantee that SASB standards address all financially material sustainability risks or opportunities unique to a company’s
business model.

Industry Description
The Appliance Manufacturing industry includes companies involved in the design and manufacturing of household
appliances and hand tools. The industry sells and manufactures products around the world, primarily selling products to
consumers through retail locations.

1
Legal Note: SASB standards are not intended to, and indeed cannot, replace any legal or regulatory requirements that may be
applicable to a reporting entity’s operations.

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SUSTAINABILITY DISCLOSURE TOPICS & ACCOUNTING METRICS

Table 1. Sustainability Disclosure Topics & Accounting Metrics

UNIT OF
TOPIC ACCOUNTING METRIC CATEGORY CODE
MEASURE

Number of (1) recalls issued and (2) total units

Quantitative Number CG-AM-250a.1
recalled2

Discussion of process to identify and manage

Discussion and
safety risks associated with the use of its n/a CG-AM-250a.2
Product Safety Analysis
products

Total amount of monetary losses as a result of

Reporting
legal proceedings associated with product Quantitative CG-AM-250a.3
currency
safety3

Percentage of eligible products by revenue Percentage (%)

Quantitative CG-AM-410a.1
certified to the ENERGY STAR® program by revenue
Product
Percentage of eligible products certified to an
Lifecycle Percentage (%)
Association of Home Appliance Manufacturers Quantitative CG-AM-410a.2
Environmental by revenue
(AHAM) sustainability standard
Impacts
Description of efforts to manage products’ Discussion and
n/a CG-AM-410a.3
end-of-life impacts Analysis

Table 2. Activity Metrics

UNIT OF
ACTIVITY METRIC CATEGORY CODE
MEASURE

Annual production4 Quantitative Number of units CG-AM-000.A

2 Note to CG-AM-250a.1– The entity shall discuss notable recalls such as those that affected a significant number of units of one
product or those related to serious injury or fatality.
3
Note to CG-AM-250a.3– The entity shall briefly describe the nature, context, and any corrective actions taken as a result of the
monetary losses.
4
Note to CG-AM-000.A – Production shall be disclosed as the number of units produced by product category, where relevant product
categories may include small appliances and major appliances.

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Product Safety
Topic Summary
Product safety is of utmost importance to appliance and tool manufacturers. When an appliance malfunctions, it can
result in fires or other hazards that damage property and cause injury or even death. The potential for product
malfunction and its sometimes-serious consequences exposes firms to risks related to litigation and negative consumer
sentiment, which can affect brand value, revenue growth, and/or market share. Failure to report known product safety
hazards to relevant authorities can result in civil penalties. Companies that dedicate appropriate resources to quality
control and testing can minimize the possibility of a product malfunction or recall, and can capture additional market
share and limit their exposure to regulatory and litigation risks.

Accounting Metrics

CG-AM-250a.1. Number of (1) recalls issued and (2) total units recalled
1 The entity shall disclose the total number of product recalls.

1.1 A recall is defined as an action to remove alleged, potentially, or known defective or hazardous products from
the distribution chain and from the possession of consumers.

2 The entity shall disclose the total number of units that were subject to product recalls.

3 The scope of disclosure includes voluntary recalls initiated by the entity and involuntary recalls mandated by the U.S.
Consumer Product Safety Commission (CPSC), Health Canada, or other relevant government agencies or regulatory
authorities, such as the European national authorities that participate in the European Commission’s Rapid Alert
System for dangerous non-food products.

Note to CG-AM-250a.1

1 The entity shall provide a discussion of notable recalls.

1.1 Notable recalls are those that affected a significant number of units of one product, or those related to serious
injury or fatality.

1.2 Relevant information to provide may include, but is not limited to:

1.2.1 Description and cause of the recall issue

1.2.2 The total number of units recalled

1.2.3 The cost to remedy the issue

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 1.2.4 Whether the recall was voluntary or involuntary (e.g., mandated by the U.S. Consumer Product Safety
Commission (CPSC)).

1.2.5 Corrective actions

1.2.6 Any other significant outcomes (such as legal proceedings or customer fatalities)

CG-AM-250a.2. Discussion of process to identify and manage safety risks

associated with the use of its products
1 The entity shall describe the business and operational processes it employs to assess and manage risks associated
with the use of its products.

1.1 The scope of disclosure shall include product safety risks to end consumer during use phase.

1.1.1 Risks may include those related to the materials used in the product, those related to the intended use
of the product, and those related to design and function of the product.

1.1.2 Examples of risks include, but are not limited to, fire, electric shocks, appliance tipping, and carbon
monoxide emissions.

2 At a minimum, the entity shall discuss how it assesses products for safety risks, including operational processes it
employs for these assessments and other actions it takes to manage hazards and risks.

3 The entity shall disclose if it pursues testing and/or third-party certification to verify safety of its finished products,
including which certifications it holds and to which products the certifications apply.

3.1 The scope of disclosure excludes discussion of mandatory product certifications.

4 For identified safety hazards, the entity may discuss the timeline to managing the hazard, identify which products or
product lines are affected, and provide an analysis of progress toward hazard mitigation.

5 Relevant operational processes may include, but are not limited to, product design, product safety testing, risk
characterization, prioritization of product risks, product labeling, product declarations, sharing of information on
product risks, and management of new information on product risks.

6 Relevant actions to discuss may include product recall, consumer education, and initiatives aimed at meeting
applicable regulations and industry standards including, but not limited to, the Consumer Product Safety
Improvement Act, Federal Hazardous Substances Act, Refrigerator Safety Act, and Association of Home Appliance
Manufacturers (AHAM) Safety Standards.

7 Relevant initiatives may include labeling, product design, material procurement, training, education, and product
declarations.

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CG-AM-250a.3. Total amount of monetary losses as a result of legal proceedings
associated with product safety
1 The entity shall disclose the total amount of monetary losses it incurred during the reporting period as a result of
legal proceedings associated with incidents relating to product safety.

2 The legal proceedings shall include any adjudicative proceeding in which the entity was involved, whether before a
court, a regulator, an arbitrator, or otherwise.

3 The losses shall include all monetary liabilities to the opposing party or to others (whether as the result of settlement
or verdict after trial or otherwise), including fines and other monetary liabilities incurred during the reporting period
as a result of civil actions (e.g., civil judgments or settlements), regulatory proceedings (e.g., penalties, disgorgement,
or restitution), and criminal actions (e.g., criminal judgment, penalties, or restitution) brought by any entity (e.g.,
governmental, business, or individual).

4 The scope of monetary losses shall exclude legal and other fees and expenses incurred by the entity in its defense.

5 The scope of disclosure shall include, but is not limited to, legal proceedings associated with the enforcement of
relevant industry regulations, such as:

5.1 EU Directive 2001/95/EC on General Product Safety

5.2 U.S. Consumer Product Safety Act (CPSA) and all associated regulations

5.3 U.S. Occupational Safety and Health Administration (OSHA) Safety Standards (e.g., requirements for testing
and certification of electrical equipment by a Nationally Recognized Testing Laboratory (NRTL) under 29 CFR
Part 1910, or by a Qualified Testing Laboratory (QTL) under 29 CFR Part 1926)

5.4 U.S. Refrigerator Safety Act

Note to CG-AM-250a.3

1 The entity shall briefly describe the nature (e.g., judgment or order issued after trial, settlement, guilty plea, deferred
prosecution agreement, non-prosecution agreement) and context (e.g., inadequate testing or certification) of all
monetary losses as a result of legal proceedings.

2 The entity shall describe any corrective actions it has implemented as a result of the legal proceedings. This may
include, but is not limited to, specific changes in operations, management, processes, products, business partners,
training, or technology.

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Product Lifecycle Environmental Impacts
Topic Summary
Companies in the Appliance Manufacturing industry are constantly seeking to differentiate their products from those of
their competitors. One key differentiating factor is the environmental impact of products over their lifecycle, which is
often associated with the cost of using appliances. This issue involves a company’s ability to design products with the
entire lifecycle in mind, from creation and use to disposal. In particular, this covers energy and water efficiency in
appliances, which account for a significant proportion of a home’s energy and water use, as well as designing for and
facilitating safe end-of-life disposal and recycling. Companies that prioritize designing and manufacturing products with
improved environmental impacts are more likely to grow consumer demand and market share. Furthermore, companies
that are able to minimize the environmental impacts of products are more likely to be better positioned to increased
regulation related to areas such as extended producer responsibility.

Accounting Metrics

CG-AM-410a.1. Percentage of eligible products by revenue certified to the

ENERGY STAR® program
1 The entity shall disclose the percentage of its revenue from eligible products certified to the U.S. Environmental
Protection Agency (EPA) ENERGY STAR® program.

1.1 Eligible products are those in a product category for which ENERGY STAR® certification exists, including the
following appliance and heating and cooling product categories: air purifiers, clothes dryers, clothes washers,
dehumidifiers, dishwashers, freezers, refrigerators, air conditioning, boilers, ductless heating and cooling,
furnaces, heat pumps, and ventilation fans.

1.2 The entity shall calculate the percentage as the revenue from products meeting the requirements for ENERGY
STAR® certification divided by total revenue from products eligible for ENERGY STAR® certification.

2 The scope of disclosure includes products that meet the requirements of the most current version of the applicable
ENERGY STAR® certification requirements.

2.1 If the entity has products certified to a previous version of ENERGY STAR® certification requirements, it shall
disclose this information, including to which version its products are certified, a breakdown of how many
products are certified to that version, and its timeline(s) for achieving certification to the most current version
of the requirements.

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CG-AM-410a.2. Percentage of eligible products certified to an Association of
Home Appliance Manufacturers (AHAM) sustainability standard
1 The entity shall disclose the percentage of its revenue from eligible products certified to an Association of Home
Appliance Manufacturers (AHAM) sustainability standard.

1.1 Eligible products are those addressed by the scope of an AHAM sustainability standard.

1.2 The entity shall calculate the percentage as the revenue from products certified to an AHAM sustainability
standard divided by total revenue from products eligible for certification to an AHAM sustainability standard.

2 The scope of disclosure includes, but is not limited to, products certified to the following AHAM sustainability
standards:

2.1 ANSI/AHAM 7001.2-2015: Sustainability Standard for Household Refrigeration Appliances

2.2 AHAM 7002-2014: Sustainability Standard for Household Portable and Floor Care Appliances

2.3 ANSI/AHAM 7003-2016: Sustainability Standard for Household Clothes Washers

2.4 ANSI/AHAM 7004-2018: Sustainability Standard for Household Cooking Appliances

2.5 ANSI/AHAM 7005-2017: Sustainability Standard for Household Clothes Drying Appliances

2.6 ANSI/AHAM 7006.2-2018: Sustainability Standard for Household Room Air Conditioning Appliances-Second
Edition

2.7 AHAM 7007-2017: Sustainability Standard for Household Microwave Oven Appliances

2.8 AHAM 7008-2018: Sustainability Standard for Household Dehumidifier Appliances

3 Additions or updates to the scope of AHAM sustainability standards and/or eligible products addressed therein
constitute additions to the scope of this disclosure.

CG-AM-410a.3. Description of efforts to manage products’ end-of-life impacts

1 The entity shall describe its efforts to manage the end-of-life impacts of its products, including those related to safe
and proper disposal or recycling of constituent chemicals and other product components, including, but not limited
to, toxic heavy metals (e.g., mercury, cadmium), rigid polymers, refrigerants, and other metals (e.g., steel and
aluminum).

2 The entity shall describe the scope of its efforts, including to which product categories, business segments, and/or
operating regions they relate.

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3 The entity shall discuss how it incorporates end-of-life considerations into the design of its product(s) such as:

3.1 Use of materials that are easily and commonly recyclable in existing recycling infrastructure

3.2 Eliminating or minimizing the use of hazardous materials or materials that may otherwise pose environmental
harm upon disposal (e.g., refrigerants with ozone depleting potential and/or global warming potential)

3.3 Designing products for disassembly (i.e., designing products so they can be easily, rapidly, and cost-effectively
disassembled with commonly available tools)

3.4 Proper labeling of products and their component materials to facilitate disassembly and recycling

4 The entity shall discuss its participation in extended producer responsibility (EPR) initiatives, including the following
aspects:

4.1 Whether the entity directly conducts product take-back, recovery, and recycling or if the entity supports
infrastructure for product recovery and recycling through joint ventures, partnerships with retailers and others,
or by funding research into recycling technologies

4.2 Whether the initiative is voluntary or mandatory (e.g., in order to maintain compliance with EU Directive
2012/19/EU on waste electrical and electronic equipment (WEEE) or the Japan home appliance recycling law)

4.3 Relevant performance measures or targets for the initiative such as the total amount of material recovered and
the total amount of material recycled

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