In ESG reporting, an increasing number of companies and public institutions are choosing to adopt the SASB standards. These standards assist them in improving sustainability performance and building trust among the public. Established in 2011, the Sustainability Accounting Standards Board (SASB) aims to facilitate greater transparency and improved communications between consumers and investors, and the companies they support. Even as the ESG landscape has become increasingly sophisticated in recent years, the SASB reporting framework has remained a reliable option for those who need to focus on the issues that matter the most.
What is the SASB Framework?
In order to make it as widely applicable as possible, the SASB framework comprises 77 separate standards covering a broad range of industries. Each set of standards divides topics according to five issue categories:
- Environment
- Social capital
- Human capital
- Business model and innovation
- Leadership and governance
These are further broken down into 26 general sustainability categories, such as labour relations, data security, and business ethics. Each of the SASB standards highlights financially material ESG information that’s pertinent to the reporting agency’s specific industry. This allows respondents to identify and report on the most relevant aspects of their sustainability performance.
Conceptual Framework Exposure Draft
The SASB updates the Standards with the help of concerned members of the public through an exposure draft, a proposed updated text released for public comment.
The concepts and proposed changes are relayed to readers through a Conceptual Framework document. It details the basic concepts, principles, definitions, and objectives used by the Standards Board and technical experts to develop SASB disclosure standards. The Conceptual Framework is also used to inform external stakeholders — companies, regulators, investors, lenders, and creditors. It’s also imperative that service providers, such as accountants, auditors, and securities lawyers, are kept in the know.
The exposure draft also contains a description of the Rules of Procedure, detailing the policies and practices used by the Standards Board to develop, issue, and maintain the SASB
Standards.
The Rules of Procedure and the Conceptual Framework documents are intended to be used in conjunction and are freely accessible online. Used together, they keep stakeholders and other concerned parties informed of the SASB’s latest regulatory and framework developments.
Linking SASB Standards with Other Reporting Frameworks
Successful SASB reporting depends on integrating sustainable practices of an organisation as well as the education of employees on ESG-related matters. Some initiatives will enable you to gradually realign everyday practices with more sustainable standards. These include developing and implementing a comprehensive ESG strategy to lead the implementation of relevant practices to further the cause. As a result, you’ll find it easier to identify relevant areas in need of improvement and those to be reported on through the SASB framework.
Although the SASB Standards are intended for use by providers of capital, such as shareholders and creditors, they can be used with a wide array of additional ESG reporting frameworks and standards. For example, the SASB is tailored for use alongside standards from over 200 organisations, including EPA, OSHA, and IPIECA, as well as reporting frameworks such as:
TCFD
The Task Force on Climate-Related Financial Disclosures (TCFD) is charged with developing recommendations for improved and increased disclosures of climate-related financial risks. It serves to empower companies to assess future issues concerning financial materiality. The SASB, on the other hand, is more focused on past activities. However, the financial materiality information it identifies can be used to better understand and anticipate potential future issues.
GRI
The Global Reporting Initiative (GRI) Standards exist to help reporting entities track, manage, develop, and publish sustainability metrics and data. The GRI Standards are intended for reporting on a wide range of sector-overarching ESG matters, including economic and ecological impacts on governments, investors, and labour organisations. SASB resources can be leveraged to enhance the financial materiality aspects of reports submitted through the GRI Standards.
CDP
Formerly known as the Carbon Disclosure Project, the CDP focuses on environmental and climate matters as they relate to the fiduciary duties of large, publicly-traded companies. Combining the SASB with the CDP framework can be an effective way to cover a wider base of ESG-related matters, both ecological and financial, in disclosure reports.
Other factors to consider in SASB reporting include knowing which of the 77 standards to use and how to disclose your findings. Choosing the most appropriate industry standard will simplify identifying and assessing climate-related financial material matters. Companies can also choose to disclose through a variety of media, such as stand-alone SASB reports, annual shareholders’ reports, integrated reports, and investor relations websites.
Lastly, it’s important to establish effective channels of communication between governance, workforces, investors, and consumers in order to make regular improvements to your SASB reporting practices.
Supporting SASB Reporting with Convene ESG
When you need a proven SASB reporting tool, look no further than Convene ESG. This all-in-one ESG reporting software suite can help you digitise financial materiality data for further development into precise, error-free SASB disclosures. And all with no extra hassle and minimal resource outlay.
Convene ESG also incorporates leading reporting frameworks and standards, such as the GRI Standards, CDP, TCFD, and more. This gives users a comprehensive toolkit for reporting to the widest range of stakeholders possible.
If you want to learn more about SASB reporting and Convene ESG, head on to our features page.
