3 Nov 14

What will SASB mean for your organisation?

listThe Sustainability Accounting Standards Board (SASB) is an independent, non-profit organisation that aims to develop and disseminate sustainability accounting standards to help US publicly-listed corporations disclose material information on how they impact value. The SASB Standards are comprised of disclosure guidance and an accounting standard on potential sustainability topics which corporations may find material in their industry.

Respondents are required to complete a Form 10-K (or 20-F) in their annual filings with the US Securities and Exchange Commission (SEC) to comply with the standard. The prescriptive nature of the reporting framework means that comparability and benchmarking of data at the industry level are key outputs from the framework valued by the investor community.

Reporting companies are expected to identify the material issues to be included in their SEC filing but primarily use the SASB disclosure guidance to recognise industry-specific sustainability topics that relate to their business. Unlike other investor focused mechanisms such as CDP or DJSI, SASB is not a scored reporting framework. Instead it looks to provide a rigid, form-based methodology for public companies to disclose similar information on topics which their industry is most impacted by. The integration of SASB reporting into current financial systems means that the disclosure takes an economic focus, for example , asking about the integration of environmental, social and governance risk factors in credit risk analysis.

Where <IR> and GRI look to create new landscapes for reporting, SASB works within the current financial regulation system by requiring a submission of a narrower set of information. SASB is however working with both the <IR> and GRI, to ensure harmonies in the development of the standards. Accordingly, once it has been fully implemented, the SEC should have information on the sustainability of companies which compares to the robustness and transparency of more traditional financial reporting information.

SASB Standards are still being developed and as of June 2014 only a few sector standards have been published whilst the others are being devised by working groups or under public consultation.

SASB Sectors

  • Health Care                 

  • Financials    

  • Technology & Communication           

  • Non-Renewable Resources 

  • Transportation          

  • Services       

  • Resource Transformation     

  • Consumption             

  • Renewable Resources & Alternative Energy

  • Infrastructure

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