5 General Sustainability Themes Of Sustainability Accounting Standards Board

by | Aug 8, 2023 | Sustainability

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Jean Rogers formed the Sustainability Accounting Standards Board (SASB) in 2011 as a non-profit organization to develop sustainability accounting standards. Investors, lenders, insurance underwriters, and other financial capital providers are becoming more aware of the influence of environmental, social, and governance (ESG) aspects on company financial performance, prompting the demand for standardized reporting of ESG data.

How Does Sustainability Accounting Standards Board Work?

SASB’s standard-setting process is based on an evidence-based methodology identifying the ESG concerns most financially relevant to a particular industry. The organization collaborates with various stakeholders, including investors, businesses, universities, and sustainability specialists, to obtain information on the most pressing sustainability concerns in a particular industry. SASB then conducts a materiality analysis to determine the sustainability topics most likely to impact a company’s financial performance significantly.

Sustainability Accounting Standards Board also solicits comments from industry experts and researchers to discover trends and best practices to ensure its standards are market-informed. The SASB standards are intended to adapt and respond to industry practices and stakeholder requirements changes. The organization is dedicated to a transparent and collaborative standard-setting process driven by its standard-setting procedures, which explain the criteria and principles for producing and maintaining its standards.

What are the 5 General Sustainability Themes of the Sustainability Accounting Standards Board?

Sustainability Accounting Standards Board’s standard-setting approach, based on industry-specificity and financial materiality, provides a sound framework for presenting sustainability information. SASB characteristics include:

What are the 5 General Sustainability Themes of the Sustainability Accounting Standards Board?

1. Global applicability: The SASB Standards seek to give investors sustainability disclosures that are “relevant, reliable, and comparable across companies on a global basis.” Most SASB measures apply to companies and investors worldwide, and the others are being examined to improve their global applicability.

2. Financial materiality: The SASB Standards aim to identify the ESG concerns most important to organizations’ financial performance across 77 industries. It is deemed financially material if withholding or misrepresenting sustainability information could significantly impact a company’s risk profile or influence capital allocation.

3. Evidence-based: The SASB Standards Board (SASB’s standard-setting arm) collects evidence from external sources to determine the financial effect of each identified sustainability issue across all industries covered. It also evaluates the specific business’s regulatory, environmental, and economic drivers to ensure the relevance of ESG concerns to the industry.

4. Sector-specificity: The SASB Standards focus on increasing the disclosure of sector-specific ESG concerns because not all sustainability issues are equally important to each business, and the same sustainability issue can present differently across industries.

5. Market-informed: When assessing sustainability problems that should be disclosed for the industry, the Standards Board solicits opinions from key stakeholders—companies, investors, and other market participants.

Also Read: What Is ESG Consulting?

SASB Terminology and SASB Standard Structure

When examining Sustainability Accounting Standards Board Standards, a corporation should become acquainted with the following elements:

  • Standards Application Guidance: A corporation should begin reviewing its industry standard(s) using this additional document that offers universal instructions for implementation relevant to all industry standards.
  • Disclosure Issues: Each SASB Standard offers a list of disclosure subjects that differ by industry. The standard lists and quickly illustrates how various facets of the topic’s management or mismanagement may impair a company’s potential to build long-term value. SASB Standards typically cover six disclosure issues per industry.
  • Accounting Metrics: Each SASB Standard provides firms with standardized quantitative—or, in some circumstances, qualitative—metrics to gauge performance on each disclosure issue or a part of the topic. SASB Standards feature an average of 13 accounting criteria per industry.
  • Technical Protocols: Each accounting for sustainability metric is backed up by technical protocols which offer guidance on terms, scope, accounting, creation, and appearance, and these can also act as a foundation for appropriate standards for an autonomous, third-party assurance engagement. The technical protocols ensure that measurements are consistently compiled and allow for comparisons between firms.
  • Activity Metrics: The standard also contains activity metrics to assess the scope of the issuer’s business, providing operational context and supporting SASB accounting metrics normalization, which is critical for analyzing relevant disclosures.

Who uses SASB Standards and Why?

The SASB Standards can be used by any organization because there are no restrictions on who can use the framework. However, due to the SASB Standards’ topic-specific nature, they are most typically used by investors and private enterprises. According to the VRF page on global SASB standard use, “any types of market stakeholders, such businesses, advisors, and others, support and use SASB by being members of the SASB Alliance and licensing SASB Standards.

SASB is utilized globally, and according to a 2021 SASB report, “more than 225 investors and fund managers corresponding to roughly $72 trillion in assets under leadership across Europe, Asia, the Americas, the Middle East, and South America engage in the SASB Alliance or have licensed SASB Standards for use in investment tools and processes” Companies and investors mainly utilize SASB to examine the material challenges of a particular industry/company and to establish expected KPIs. The SASB Standards assist organizations in benchmarking against industry peers by advising on which material concerns and important indicators to focus on and report on.

A SASB Correspondence Table is typically included in a company’s Sustainability or CSR Report to show how they used the Standards and further explain quantitative and qualitative data in the report. On the other hand, investors can utilize the SASB Standards to analyze, compare, and better understand their portfolios. SASB Standard guidance offers investors extra context on industry standards (for example, informs investors of ESG reporting rules within a specific industry), helping investors to identify leaders and laggards within their portfolio and better understand risks and opportunities.

SASB Standards and ESG Reporting

ESG performance is increasingly a significant predictor of a company’s long-term financial health. ESG advice and reporting frameworks are increasingly being used by governments, investors, financial institutions, and the general public to assess company models and distinguish leaders from laggards. Sustainability standards provide comparable and standardized disclosure of ESG data in CSR, ESG, or annual reports, making reporting frameworks actionable.

The SASB Standards highlight the ESG information that is financially significant in determining how an organization develops corporate value. They help establish ESG reporting frameworks based on principles such as the TCFD and IIRC. SASB’s methodology is designed to assist businesses in communicating their external ESG impacts in the language of investors, creditors, and other financial stakeholders.

Also Read: ESG Reporting: All You Need To Know

How To Apply SASB Standards?

The SASB Standards include an Implementation Primer that leads businesses through reporting and engaging with investors per the SASB Standards.

1. Create a Foundation

  • Establish a precedent with company leadership—meet with the Board of Directors and top leadership to gain their support.
  • Create capacity by creating a sustainability reporting team and identifying knowledge bases and skill sets.

2. Select Tools

  • Learn about the frameworks and standards that are available.
  • Establish transparency and communication goals (identify and prioritize target audiences).
  • Engaging with target audiences and studying peer disclosure to understand information requirements and expectations better
  • Choose the best framework for your company’s requirements.

3. Choose Where To Disclosure

  • Understand the mandatory disclosures (which will vary depending on region/country and industry).
  • Examine the communication channels available and the conditions of voluntary reporting.

4. Comprehend SASB Standards

  • Learn SASB vocabulary and the SASB standards itself.
  • Decide which industry standards are applicable
  • Decide which disclosure topics are applicable

5. Evaluate Readiness

  • Examine SASB metrics
  • Conduct a gap analysis to determine whether or not the company is currently reporting sustainability information and whether or not data is being collected.
  • Confirm the accuracy of the data and the current practices.

6. Development Disclosures

  • Determine presentation format—consider how relevant facts might be effectively presented to investors.
  • Set the stage for disclosure themes and metrics.
  • Declare omissions and changes to disclosure subjects and accounting metrics.
  • Examine the overall story.

7. Allow For Continuous Improvement

  • Keep track of the aspects that influence ESG risk/opportunity.
  • Market practices in each important disclosure area (peer disclosure, stakeholder involvement, disclosure requirements, and recommendations) should be monitored.
  • Maintain an eye out for SASB Standards changes.
  • Keep an eye on SASB metrics performance.

What are the Benefits of Using SASB Standards?

SASB Standards are appealing to businesses and investors for a variety of reasons. SASB Standards can assist companies in meeting investor demands for comparable, consistent, and financially material sustainability disclosures. Companies of different sizes and industries can readily adopt SASB Standards because they are tailored for specific sectors and complement existing ESG standards and frameworks. Currently, up to 2230 enterprises in 70 jurisdictions and 66 markets are reporting per the SASB measures.

Investors perceive SASB Standards as industry-based, metric-driven, and focused on financial materiality, allowing the incorporation of sustainability considerations into investment and stewardship choices across global portfolios and asset classes. Investors view SASB Standards as the primary means for firms to present their sustainability information in a standardized, consistent style. At the time of writing, 327 institutional investors rely on SASB-based disclosures to influence their investment decisions, representing 28 markets and USD 82 trillion in assets under management (AUM).

Bottom Line

SASB defines “sustainability” as corporate practices that maintain or improve a company’s ability to deliver long-term shareholder value. SASB categorizes these efforts as belonging to one of five “sustainability dimensions”: the environment, human capital, social capital, business model and innovation, and leadership and governance. Sustainability accounting is the measurement, monitoring, and reporting of such operations. Indeed, the operations that generate long-term value development will differ from sector to industry and business to company. As a result, determining what a particular firm should disclose necessitates careful examination of crucial concerns in light of the organization’s unique circumstances. SASB standards are meant to serve as a helpful guide during this process.


Q1. What are the standards of the Sustainable Accounting Standards Board?

SASB Standards enable firms to offer industry-based disclosures regarding sustainability-related risks and opportunities that could reasonably be expected to affect cash flows, access to finance, or cost of capital in the short, medium, or long term.

Q2. What is the SASB’s (Sustainability Accounting Standards Board) goal?

SASB Standards bring together businesses and investors to discuss the financial implications of sustainability. SASB Standards assist businesses in disclosing important sustainability information to their investors.

Q3. What exactly is sustainability accounting?

Measuring, analyzing, and reporting a company’s social and environmental implications is known as sustainability accounting. Different stakeholders have diverse interests. Employees may be interested in salary disparities, such as how much more the CEO earns than the ordinary worker.

Also Read: What Is ESG Investing?


  • Dr. Tanushree Kain

    Tanushree is a passionate Environmentalist with a Doctorate in Environmental Sciences. She is also a Gold medalist in Master of Science (M.Sc), Environmental Sciences. She has 6 years of experience as a guest faculty in Environmental Sciences. With her combination of technical knowledge and research expertise, she can create clear, accurate, and engaging content that helps users get the maximum information regarding environmental topics.

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