Why companies use SASB Standards
As of August 2022, the International Sustainability Standards Board (ISSB) of the IFRS Foundation assumed responsibility for the SASB Standards. The ISSB has committed to maintain, enhance and evolve the SASB Standards and encourages preparers and investors to continue to use the SASB Standards.
The SASB Standards play an important role in the first two IFRS Sustainability Disclosure Standards, IFRS S1 General Requirements for Sustainability-related Disclosures and IFRS S2 Climate-related Disclosures. Learn more about how the SASB Standards support the application of IFRS Sustainability Disclosure Standards.
Businesses face challenges and opportunities affecting their long-term sustainability, from climate change and resource constraints to urbanisation and technological innovation. Institutional investors need to evaluate how these issues affect companies to inform their investment decisions. SASB Standards help companies around the world identify, measure and manage the sustainability-related risks and opportunities that most directly affect cash flows, access to finance and cost of capital.
SASB Standards meet investor needs.
Investors across asset classes want comparable, consistent and reliable data on relevant sustainability factors. These same investors recognise SASB Standards as a core tool to achieve this disclosure.
SASB Standards are cost-effective.
On average, each standard has six disclosure topics and 13 metrics.
SASB Standards are industry-based.
The issues that are most likely to affect an entity’s cash flows, access to finance and cost of capital vary by industry. Industry-based disclosure reduces costs and minimises noise by surfacing the most relevant information.
SASB Standards can be used with other frameworks and standards.
SASB Standards are a practical tool for implementing principles-based frameworks, including the IFRS Sustainability Disclosure Standards and Integrated Reporting Framework. Many companies use both SASB and GRI Standards to meet the needs of various audiences.
SASB Standards support ISSB implementation.
The ISSB has confirmed that its standards will require industry-specific disclosures and, in the absence of specific IFRS Sustainability Disclosure Standards, companies must consider the SASB Standards to identify sustainability-related risks, opportunities and related metrics. Preparers using SASB Standards will be in a prime position to apply IFRS Sustainability Disclosure Standards.
We also appreciate how the SASB Standards’ format and structure provides a direct and straightforward way of presenting sustainability information that is powerful and helps us explain our progress to investors.
Many of our largest investors strongly encouraged us to use the SASB framework as the preferred way to provide them with the most decision-useful Verizon ESG information.
SASB’s focus on industry-specific metrics and disclosures can be rounded out by GRI’s focus on broader economic, environmental, and social impacts.
There’s a groundswell of acknowledgement that certain environmental and social factors are financially material and having a framework like SASB gives companies a starting point to determine what they should be thinking about and what they should be disclosing.
SASB standards were the right fit for at least two reasons: 1) The standards are widely recognised and supported by global investors, and 2) because of their focus on financial materiality, SASB standards allowed us to test our own materiality assumptions. In this way, SASB standards provided a needed “link” back into our capital markets-focused reporting, helping us supply providers of capital with financially material, decision useful, and industry specific ESG information.