With the growing focus on Environmental, Social and Governance (“ESG”) by shareholders, regulators, customers, employees and communities and the vast number of rankers and raters in the marketplace today, all of whom are expecting to see heightened levels of disclosure, it may be difficult for public companies to discern where to focus their resources to ensure that these groups receive accurate and comparable ESG information.
Today’s various ESG frameworks had not yet emerged when I began engaging with shareholders several years ago, while at a public company, with the goal of understanding their perspectives on the matters they consider most important and the most effective way to disclose the information they sought. This presented challenges for both issuers and shareholders because there were no uniform standards that could be used to compare ESG disclosures across different companies within the same industry. But after ESG frameworks began to emerge, many investors consistently encouraged the use of SASB Standards because they provide a framework for the generation of comparable and reliable information that enables a company to provide transparent, useful and relevant ESG data as it relates to that company’s business, and that may also contribute to long-term value for its investors.
How does one practically accomplish releasing an initial SASB Standards disclosure? This step-by-step guide was created to help do just that. While the comprehensive SASB Standards Implementation Primer goes into great depth, with case studies, interviews and worksheets to help businesses identify and track their progress on key action items, I originally wrote this step-by-step guide as a brief and practical checklist to fit my company’s unique facts and circumstances. I hope you, too, find it a useful supplement – an eight-step approach walking issuers through the SASB Standards disclosure process:
- Understand your stakeholders’ expectations
- Identify which SASB Standards are applicable to your business
- Perform a gap analysis of your ESG practices and current disclosures
- Consider changes to current practices, if needed
- Draft your SASB Standards disclosure
- Discuss with executive management
- Socialize Your SASB Standards disclosure
- Conduct subsequent shareholder engagement discussions.
I encourage companies to consider working toward releasing their own SASB Standards disclosure. By providing the marketplace with the information that investors and others are seeking, everyone benefits. Both investors and companies gain a better understanding of how ESG risks are being addressed and how ESG opportunities are being optimised.
The views and opinions expressed herein are solely those of the individual author and do not purport to reflect the views or opinions of Bank of the West or any of its affiliates. The information and materials provided herein are for informational purposes only. They are not provided for the purpose of providing legal advice, nor to convey or constitute legal advice, nor as a substitute for obtaining legal advice from a qualified attorney.
