Sustainability Accounting Standards Board Publishes 77 Industry Sustainability Standards
November 10, 2018
This week, the Sustainability Accounting Standards Board (SASB) released 77 industry specific standards relating to sustainability, capping what it said was a six-year effort. Announcing the standards, SASB Board Chair Jeffrey Hales, PhD stated ““What makes SASB standards unique in the marketplace is their focus on industry specificity and financial materiality, universal concepts that are important for investors and businesses around the world.” In a press release SASB indicated the standards were formulated through engagement “with investors and businesses from all sectors.” In the human capital area, SASB focuses on labor standards, health and safety and employee engagement diversity and inclusion.
The SASB press release lists 11 large companies that have “begun using the SASB Standards.” The release notes that 56 investors are now affiliated in some way with SASB, representing $29 trillion in collective assets under management.
SASB is one of a number of standards organizations competing for attention on ESG issues, and its press release notes that the SASB standards “can be used alongside other sustainability frameworks. For example, the standards are well-aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and are complementary to the Global Reporting Initiative (GRI).”
Time will tell whether the standards become widely accepted based on investor support (for example State Street Global Advisers is a strong proponent) or whether there continues to be a diffuse set of standards from which companies make their own determinations about the ESG measure most relevant to their businesses, and related contextual disclosures.