Top 10 business conduct risks in the US over the past 5 years
# April 25, 2024
Over the past five years, spanning from 2019 to 2023, the United States has encountered a spectrum of factors influencing business conduct risks. These include the profound impacts of climate change, the disruptive onset of the COVID-19 pandemic, supply chain disruptions, escalating geopolitical tensions, and conflicts such as the war in Ukraine, among other factors.
Moreover, a dynamic regulatory landscape coupled with a notable shift in public consciousness has heightened expectations regarding environmental stewardship, social responsibility, labor rights, and equitable treatment across various sectors. Movements such as Black Lives Matter, women's equality advocacy, and LGBTQ+ activism have further underscored the imperative for US companies to adeptly navigate and manage these nuanced, multifaceted business conduct risks.
Navigating the intricate landscape of business conduct risks over the past five years has required a keen understanding of evolving dynamics and raises the question: What are the sectors that were associated with the most business conduct risks in the US in the past five years?
# Top 10 sectors most prone to business conduct risks in the US 2019 – 2023
Over the past 5 years in the US, the Financial Services, Retail, and Food and Beverage sectors experienced the highest number of reported risk incidents. Hover over the graphic for incident count by sector and year.
RepRisk covers more than 250,000 private and public companies across 34 sectors spanning developed, emerging, and frontier markets. In the past five years, from January 1, 2019, to December 31, 2023, 37’501 companies were linked to at least one business conduct risk incident1 in the US, according to RepRisk data.
The sectors in the US with the highest number of risk incidents over the past five years are:
▪ Banking and Financial Services (4,918)
▪ Food and Beverage (4,003)
▪ Retail (3,782)
▪ Industrial Goods and Services (3,436)
▪ Travel and Leisure (2,957)
# Top 10 issues for business conduct in the US 2019 – 2023
Over the past 5 years, the most prevalent risks in the US have been associated with Violation of national legislation, Fraud, Products (related to health and environmental issues), Impacts on communities, and Local pollution. Hover over the graphic for incidents counts by issue and year.
In total, 39,992 business conduct risk incidents were documented in the US from January 1, 2019, to December 31, 2023.2 RepRisk’s core research scope is comprised of 28 Issues that are broad, comprehensive, and mutually-exclusive. Furthermore, RepRisk covers 74 Topic Tags that are specific and thematic, and can be linked to multiple Issues. This dynamic concept allows for integrating emerging topics, such as seabed mining, through Topic Tags while ensuring consistency over time across Issues. Issues and Topic Tags combined, RepRisk covers 102 business conduct risk factors.3
The top Issues associated with business conduct risk for US entities by incident count are:
▪ Violations of national legislation (23,423)
▪ Fraud (9,564)
▪ Products related to health and environmental issues (8,454)
▪ Impacts on communities (6,822)
▪ Local pollution (5,272)
To offer insight into the distribution of these Issues across sectors and years, Table 1 displays the respective incident counts in the US.
Table 1. Distribution of incidents of top business conduct risks across sectors and years in the US. Please note that an individual incident may be associated with multiple Issues. Therefore, the incident count does not correspond directly with the chart presented above. Click on the table to enlarge it.
The rise in risk incidents mirrors the increased public scrutiny on companies engaged in business conduct risks – driven by Violations of national legislation4. This Issue refers to the violation of national and state legislation in relation to an environmental, social or governance issue. This includes, for example, breaches of national or regional laws, breaches of bilateral or regional treaties, court actions by government agencies or other companies for questionable business practices, breaches of domestic laws for crimes committed abroad, business with nationally sanctioned countries, etc. It is hardly surprising to see a consistently high prevalence of risk incidents related to Violations of national legislation, considering the steady issuance of new regulations by regulators and their heightened enforcement efforts. This trend is fueled by growing public expectations, as mirrored in publicly available sources – RepRisk's exclusive focus.
RepRisk generated this data insight by excluding company self-disclosures from its data – analyzing instead over 2 million documents from more than 100,000 media and stakeholder sources in 23 languages every day.
Read more RepRisk reports:
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