Who does this affect: The SASB standards can be used on a voluntary basis by companies across 77 industries. The SASB standards identify which ESG topics are relevant to each of these 77 industries to aid companies in their reporting. While the standards are voluntary today, the International Sustainability Standards Board (ISSB) is incorporating the SASB standards into the ISSB standards. As such, companies subjected to mandatory reporting under the ISSB standards may be expected to consider the SASB standards for their industry.
Why has it been introduced: The SASB standards were created to focus on industry-specific metrics rather than broad industry-agnostic disclosure standards since some sustainability issues are more relevant to some industries than others. For example, SASB sees energy management as a relevant issue to companies in the Real Estate industry, but not as much for those in the Toys & Sporting Goods industry.
What do the standards say: SASB standards lay out the ESG issues that are most likely to be financially material for each of the 77 industries covered. For each industry, the SASB standards include:
- Disclosure topics: industry-specific material sustainability issues.
- Accounting metrics: quantitative and (sometimes) qualitative metrics to help companies measure their performance against disclosure topics
- Technical protocols: guidance on definitions, scope, and other details to ensure metrics are comparable between companies.
What is the history of SASB: SASB published their first set of industry-specific standards in 2018. On August 1, 2022, the Value Reporting Foundation, which oversees the SASB standards, became part of the IFRS Foundation, which manages the ISSB.
Where is reporting required: SASB standards do not prescribe where companies should report. Instead they give a range of options, including a stand-alone SASB report, a sustainability report, and integration into financial reports.