How can SASB guidelines contribute to a global Sustainability Standard?

November 22, 2022
By CSE

The Sustainability Accounting Standards Board (SASB) has experienced tremendous growth since its founding just over a decade ago.

 

 

Over half of the S&P Global 1200 are now using SASB standards within their reporting frameworks – signaling massive adoption on a grand scale. From 2019-2020, SASB reports grew 375% and another 215% from 2020-2021. The reason for this widespread adoption is clear – it fills gaps that other standards do not!

 

What makes the SASB standards unique?

What makes these standards unique is the effort to simplify reporting by narrowing the scope of reporting from impact materiality to financial materiality. In other words, sustainability reporting traditionally takes a holistic perspective, trying to account for organizational impact on the economy, the environment, and society. Whereas the SASB standards were developed for a narrower perspective, primarily measuring financial materiality, or descriptive metrics to assess enterprise value across industry. This has sparked much debate. Many argue that impact materiality should be the focus as the science of quantifying impact across sustainability’s domains is still largely undefined. Others argue that common frameworks around financial materiality should be the focal point to allow capital leveraged more effectively. Both arguments are compelling and necessary for our progression. 

 

From SASB to ISSB

SASB has been in the news a lot the past three years, and it is worth noting this Standards thrust into the spotlight. In 2020, a collaborative effort with GRI was made to demonstrate these seemingly competing standards are more effective in compliment. Then in 2021, SASB merged with the International Integrated Reporting Council (IIRC) to form the Value Reporting Foundation (VRF). Now in 2022, VRF has consolidated into the International Financial Reporting Standards (IFRS) Foundation to accomplish the goal of their newly formed International Sustainability Standards Board (ISSB).

 

Now the ISSB is in the process of developing comprehensive global sustainability standards primarily related to SASB and TCFD. It seems that the weight of these organizations, with partnership from global security commissions, SASB metrics along with GRI and TCFD form the baseline for a global sustainability standard.

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