What is Sustainability Accounting Standards Board (SASB) and and why it's so relevant today

Introduction

Sustainability management is complex, expensive and constantly evolving. The ESG ecosystem is crowded with multiple frameworks and guidelines for sustainability reporting. Navigating through this constantly changing ecosystem can be challenging, especially for organisations that have limited experience with sustainability reporting. It hence becomes essential to understand the benefit different frameworks provide to an organisation and its stakeholders.

The Sustainability Accounting Standards Board (SASB) was founded as a nonprofit organisation in 2011 to help businesses and investors develop a common language about the financial impacts of sustainability. It is one of the most prominently used standards for sustainability reporting - helping companies attain ESG compliance and giving investors insight into financially material sustainability factors. The International Integrated Reporting Council (IIRC) and the SASB merged into the Value Reporting Foundation (VRF), in June 2021. 

What is SASB?

SASB sets standards for the disclosure of sustainability oriented information by companies to their stakeholders. SASB standards track ESG issues and performance across 77 industries. 

• SASB categorises industries and sectors and uses nuances of each industry to define the material disclosures of specific sustainability accounting criteria.   
• The SASB Materiality Map graphically displays the complete set of 77 Industry Standards (aligned to US based Sustainable Industry Classification System, or SICS) for specific industries.  
• The industry-specific approach based on the SASB Materiality Map allows the Standards to cater to each type of business, supplying detailed guidance and examples of best practices.

Source:   https://materiality.sasb.org/

How is SASB different from other frameworks?

SASB, unlike other ESG compliance and reporting frameworks, is catered to specific industries. They take into account that different industries have different sustainability risk factors to build out industry specific disclosures for ESG compliance requirements. SASB’s framework is built to support companies in sharing their ESG impacts through the language of investors, debt holders, and internal financial stakeholders.

• SASB uses the Sustainable Industry Classification System (SICS) to identify different sustainability requirements across industries and sectors 
• In SICS, a company’s sustainability risks and opportunities are more important for its classification than other traditional factors, such as economic cycles and revenue streams. 
• SASB lists accounting metrics and sustainability disclosures for 11 sectors and 77 different industries  
  

What are the benefits of SASB reporting?

The SASB standards deliver important benefits for corporations, investors, and ESG adoption overall. 

• SASB allows businesses to build ESG sustainability strategies around the most material issues for their industry
• SASB reporting allows organisation to clearly compare themselves to peers within their industry facilitating accurate benchmarking 
• Investors look at SASB Standards as a core tool to get comparable, consistent, and reliable data on financially material sustainability factors. 
• SASB offers flexibility in reporting, allowing you to club their accounting metrics along with disclosures from GRI, TCFD or CDP.
  

How does SASB fit into the ESG compliance and reporting  ecosystem?

SASB Standards identify the sustainability information that is financially material, which is to say material to understanding how an organisation creates enterprise value. The framework is designed for users whose primary objective is to improve economic decisions. 2424 companies have used SASB for ESG compliance reporting since 2020. 

Is SASB the future for ESG compliance and reporting?

SASB offers immense value to organisations working towards ESG compliance. The industry specific model draws attention to the most appropriate disclosures for the business and the investors. Its unique benefits along with its collaborative approach through partnerships with organisations like the Value Reporting Foundation (VRF) positions the framework to become a global standard for ESG reporting. 

Explore the relevance of the Sustainability Accounting Standards Board (SASB) for businesses and investors in ESG reporting. Industry-specific standards for accurate and meaningful sustainability disclosures.