Reporting on sustainability factors just got easier
by Bija Knowles
The Sustainability Accounting Standards Board (SASB) has published the world’s first set of industry-specific sustainability accounting standards covering financially material issues.
According to the SASB, the standards signal a new era for global capital markets in which businesses can better identify and communicate significant opportunities for sustaining long-term value creation. The standards cover 77 industries and address the subset of sustainability factors most likely to have financially material impacts on the typical company in each industry, with the goal of helping investors and companies make more informed decisions.
'Important milestone for global capital markets'
SASB chair Jeffrey Hales said: “This is an important milestone for global capital markets. Companies and investors around the world now have codified, market-based standards for measuring, managing, and reporting on sustainability factors that drive value and affect financial performance.”
Numerous companies have already started using the SASB standards, including GM, Merck, Nike, Kellogg’s, JetBlue, CBRE, Diageo, Groupe PSA, Schneider Electric, Host Hotels, and NRG Energy.
The SASB says that its standards support robust, investor-grade reporting in a range of communications channels, including financial filings, sustainability reports, annual reports, and corporate websites. It stated: “As corporate users have demonstrated, 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).”
And Robert Herz, SASB Foundation board member and former chairman of the Financial Accounting Standards Board (FASB) added: “SASB’s newly codified standards will help companies around the world focus on the sustainability issues that matter to financial performance and to better communicate their performance on these issues to global investors in a decision-useful and comparable way.”
You can download any of the 77 industry-specific standards at www.SASB.org.
CTMfile take: As SASB chair Jeffrey Hales mentions, this is an important milestone for global capital markets but it's also a hugely important development for corporate accounting and compliance professionals, who will now have a set of standards for reporting on sustainability factors that have an effect on financial performance.
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