Customers, investors, and other stakeholders are increasingly demanding more transparency from companies on environmental, social, and governance (ESG) factors and other non-financial risks. As a result, there has been an increase in the number of companies voluntarily providing this information. However, while 75 percent of companies in the S&P 500 published sustainability reports in 20141, investors have expressed a high level of dissatisfaction with the sustainability-related information being provided2.
A number of organizations have provided frameworks for sustainability reporting. The Sustainability Accounting Standards Board (SASB) is a relatively new organization, with a focus on investor information needs.
The SASB is a U.S.-based, independent non-profit organization whose goal is to develop and disseminate industry based guidance to help companies disclose decision-useful information to stakeholders. SASB standards are designed for the voluntary disclosure of material sustainability information and metrics in SEC filings, such as Form 10-K. As such, companies may use SASB standards as part of their existing disclosure controls and procedures when evaluating known trends and uncertainties. Alternatively, a company might consider the SASB guidance when providing voluntary disclosure in sustainability reports or other disclosure vehicles. Beyond disclosure, SASB standards might also help companies identify potential enhancements to corporate strategy and supporting initiatives (e.g., increasing the use of environmentally preferred materials).
If the SASB has published an industry standard relevant to your company, we recommend considering the following approach:
Understand whether the topics are relevant for disclosure
Assess the current state of disclosure and management of the topics
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