The engine that powers sustainable organisations
The Sustainability Accounting Standards Board (SASB) is one of the world’s leading ESG reporting standards. Its particular emphasis is on bridging the gap between non-financial information and financial value. First developed in 2011, it was intended to be a global benchmark of accounting standards that incorporate ESG information potentially financially material to an organisation. Today, the SASB standards are used in more than 70 countries.
The SASB standards is a set of 77 industry-specific guidelines for sustainability reporting. They are open access and accessible to the public for download. As with other reporting frameworks, materiality is principal to the reporting process.
Each standard provides detailed guidance on disclosure topics identified as most material to each industry. These are accompanied by quantitative and/or qualitative accounting metrics to measure performance on each material topic.
The accounting metrics are supported by technical protocols detailing the definitions, scope, implementation, compilation, and presentation of data. These protocols are the basis for third-party audits. Activity metrics are used to normalise data for comparability.
The above constitutes the skeletal framework of the standards. Supporting resources are available, such as the SASB Materiality Finder which helps organisations determine the most material topics for their business. The interactive tool analyses the relevance of 26 topics across five dimensions:
Another SASB tool is the Materiality Map. It plots what the 26 topics look like materially to each of the 77 industries that are covered in the framework. Reporting organisations should still conduct a comprehensive materiality assessment, but the tool is a great way to narrow down the areas of focus.
The standards are investor-oriented, with materiality driven primarily by investor relevance and financial impact. Hence, they are particularly suitable for developing reports for investor use, although their application is universal.
The SASB standards approaches sustainability through an accounting lens, so all financial metrics should correspond to those in the financial statements. Part of the data collection process should, as first steps, consist of selecting and standardising units of measure, explaining uncertainty and estimates used, as well as defining the reporting period and entity. At the beginning of the reporting process, take stock of the accounting and activity metrics recommended by the standards, including normalised data.
At this stage, you may find external consultants helpful to maintain control of the data collection and reporting process. The metrics and technical protocols of the standards can be a sprawling effort especially when the material topics add up. This is where data automation and reporting technology can come in handy. The SASB standards are compatible with other recognised reporting frameworks such as the Global Reporting Initiative (GRI) Standards, which is commonly combined together in reporting approaches.
In line with the growing practice of digital reporting, SASB has developed an XBRL taxonomy that functions as a supplemental guide. This guide can be freely downloaded. This will be useful to companies that are subject to EU legislation on tagging requirements, such as that required by the most recent changes to CSRD.