Different industry classification standards are used to categorize companies and organizations into specific industry groups based on their primary business activities. These standards provide a standardized framework for organizing and analyzing industries, facilitating comparisons and benchmarking across companies and sectors. Some of the most commonly used industry classification standards include:
Global Industry Classification Standard (GICS): Developed by MSCI and S&P Dow Jones Indices, GICS is widely used by the global investment community. It categorizes companies into 11 sectors, which are further divided into industry groups, industries, and sub-industries. GICS is hierarchical and aims to capture the underlying business activities of companies.
North American Industry Classification System (NAICS): NAICS is used primarily in North America and was developed by the United States, Canada, and Mexico. It classifies businesses into sectors, subsectors, industry groups, industries, and sub-industries based on similar production processes and economic activities. NAICS is regularly updated to reflect changes in the economy.
Standard Industrial Classification (SIC): SIC was developed in the United States by the Securities and Exchange Commission (SEC) and was used until it was replaced by NAICS. It categorizes businesses into industries based on similar production processes, products, and services. While SIC is no longer actively maintained, it is still referenced in historical data and some regulatory filings.
International Standard Industrial Classification (ISIC): ISIC is maintained by the United Nations and is used globally to classify economic activities at the national and international levels. It categorizes industries based on their primary economic activities and is used for statistical reporting and analysis by governments, international organizations, and researchers.
Industry Classification Benchmark (ICB): Developed by FTSE Russell, ICB is used globally to classify companies into industries and sectors. It categorizes companies based on their primary source of revenue and business activities, with the aim of providing a consistent framework for equity market analysis and investment management.
These industry classification standards serve various purposes, including investment analysis, financial reporting, economic research, and government statistics. While they may differ in their structure and coverage, they all aim to provide a systematic and standardized way of organizing industries and companies for analytical and comparison purposes.
- For investors
| Name | Organization |
| GICS | S&P, MSCI |
| ICB | FTSE |
| TRBC | Thomson Reuters |
| MGECS | Morningstar |
| BICS | Bloomberg Industry Classification Standard |
Table 1 Industry classification standards – For Investors
- For government census
| Name | Country |
| NAICS | United State |
| Industrial classification for national economic activities | China government |
| NACE | Europe |
| ISIC | United Nations |
Table 2 Industry classification standards – For Census
Links:
MSCI:
https://www.msci.com/our-solutions/indexes/gics
NAICS:
NAICS Association ♦ Your Home for all things NAICS & SIC!
SEC:
https://www.sec.gov/corpfin/division-of-corporation-finance-standard-industrial-classification-sic-code-list
https://unstats.un.org/unsd/publication/seriesm/seriesm_4rev4e.pdf
https://www.lseg.com/en/ftse-russell/industry-classification-benchmark-icb