SASB standards - Understanding & Apply. What do you need to know?
Updated: Sep 25, 2022
SASB as an organization!
The Sustainability Accounting Standards Board (SASB) is a non-profit organization, found in 2011 with the aim is to develop the investor focus - industry specific sustainability accounting standards.
SASB as a ESG reporting standards!
SASB standards are standing out from other standards and frameworks thanks to the following characteristics:
The SASB standards, published in 2018 are composed of a comprehensive set of standards with 11 sectors, 77 industries, covering 26 general ESG topic divided into 5 dimensions: the Environment, Human capital, Social capital, Business model & innovation and Leadership and governance.
Dimensions | Environment | Social capital | Human capital | Business model & Innovation | Leadership & Governance |
Topic | •GHG emission •Energy & fuel management •Water & wastewater management •Waste management •Biodiversity | •Labor relation & practices •Diversity, equity & inclusion •Employee safety, health & well-being •Compensation & benefits | •Human right & community relation •Access & affordability •Customer privacy & welfare •Fair disclosure & labelling; marketing & advertising | •Lifecycle management of product/ service •Environmental & social impacts on assets & operations •Product quality & safety | •Systemic risk management •Accident & safety management •Business ethics & transparency •Political activities & regulatory capture •Value chain management |
SASB also released the SASB Industry Finder & SASB Materiality Map which assist companies to find the industry sector they are belong to at the same time guide companies on the topic that could be material to them. One note here is that big corporations which operate in vary field are able to apply more than one industry sector material map. Companies are also encouraged to consolidate their own material topic base on SASB standards.
Accordingly, the standardized SASB report from companies should include the following elements:
Industry/ company description: a brief description to give audience an over view of the company and the industry that companies operates in.
Topic list & topic description: The material topic that could impact on the ability of the company to create long term value, depend on how the company manage that topic. The SASB standards suggests about 6 disclosure topics for every industry.
Sustainability accounting metric: A closer description of what exactly the company will measure within each disclosure topic. SASB standards detail accounting metric with standardized quantitative or qualitative method, for each industry, there are on average if 13 accounting metric
Technical protocol: The answer for how to measure accounting metric, in other words, base on which standards to measure, compile data. The SASB sustainability technical protocol could be seen as the base for independent, third party engagement as well as allow the compare between companies in the same industry.
Activity metric: The way to normalize the above technical part and help to have the best interpretation of the business operational context.
A peek on how to use SASB standards to report your ESG performance - The view from SASB implementation primer
Reference:
1. SASB organization, https://www.sasb.org/about/
2. SASB conceptual framework, https://www.sasb.org/standards/conceptual-framework/
3. SASB implementation primer, https://www.sasb.org/implementation-primer/
