As investors remain focused on ESG reporting, SASB Standards are increasingly important. These standards help companies disclose sustainable information to investors in a manner that allows investors to compare like with like.
As investor demand for reliable sustainability reporting continues to rise, SASB Standards have become a key pillar of effective corporate disclosure. In a landscape where sustainability data is often inconsistent, SASB offers a clear, sector-specific framework that links sustainability issues to financial performance. This structure enables stakeholders to assess how companies manage material environmental, social, and governance (ESG) risks, while giving investors the consistency needed to compare performance across peers and industries.
Established in 2011, the Sustainability Accounting Standards Board (SASB) is a nonprofit organization dedicated to enhancing communication between companies and investors on financially-material sustainability topics. It plays a key role within the broader sustainability reporting ecosystem, complementing frameworks such as the Global Reporting Initiative (GRI) and the Task Force on Climate-Related Financial Disclosure (TCFD). While the sustainability landscape has become markedly more complex since 2011, SASB remains a practical and foundational framework that brings clarity to sustainability reporting
What Are the SASB Standards?
The SASB Standards are a set of rules for different companies that are currently maintained by the IFRS Foundation under the ISSB. The Standards were developed with participation from companies, investors, and experts in the subject areas, taking evidence-based research into account. An independent board provides oversight during the creation of every standard.
There are 77 standards to reflect the needs of different industries. Rather than name every standard created, let's focus on the commonalities. There are 26 subtopics under the ESG umbrella that are organized into the following issue categories:
- Environment
- Social capital
- Human capital
- Business model and innovation
- Leadership and governance
Every industry-specific standard identifies the most relevant ESG issues when it comes to financial performance within that sector. This rigorous selection criteria allows companies to efficiently report on the most relevant information.
In addition to the standards, SASB provides two guides. One helps investors better understand financially material ESG issues, so they can make investment decisions that align with their values. The other guide helps companies implement the Standards and comes in handy when it's SASB reporting time.
Find the correct SASB standards for your company.
What Is SASB Reporting?
Now let's move on to SASB reporting requirements.
Before they can report the right data, companies need to know what should be reported and how to monitor it. Take greenhouse gases as an example. If companies are reporting on their emissions, they need to know how to measure emissions so they can report accurate data.
Thus, the first step in SASB reporting is to review the Standard for your specific industry. Not everything within the standard may be relevant to your business, so take robust notes on everything that does apply to your business.
Next, think about the most appropriate data collection methods. Using greenhouse gas again as an example, reflects on what activities contribute to greenhouse gas, such as business operation and facilities or employee travel and commuting. Then, determine the best way to measure them and begin to collect data.
When it's time to report, aggregate the data and report in the requested framework. Reported data is then presented to investors who can factor it into account when making investment decisions.
While the data sets that companies will need to report differ widely based on industries, they generally cover common sustainability topics including:
- Water use
- Energy management
- Customer privacy and data security
- Labor practices
- Product design
- Product lifecycle management
- Business ethics
SASB FSA Credential
One term you'll come across when reviewing SASB materials is the FSA credential. In this context, FSA stands for Fundamentals of Sustainability Accounting. The FSA credential is a relatively new exam unveiled by the SASB, which tests professionals on concepts related to sustainability materiality and their financial implications. Professionals who pass the exam will have a strong understanding of the relationship between material sustainability and business finances.
Since the exam focuses on analysis and quantification of sustainability as it relates to the business values, there is a clear correlation between credentialed employees and future-thinking business leaders. Businesses can use the FSA credential to make hiring decisions or to upskill existing staff to better understand sustainability reporting requirements. FSA also aligns with the evolving expectations for corporate ESG literacy, further cementing its importance for business leaders.
Why Is SASB Important?
SASB is important because of the increased demand for businesses to meet ESG standards as well as SEC ESG proposals and global sustainability regulations. Given that businesses need to adhere to ESG governance areas, there will always be a need to show their work — essentially, to report on what they have done and the takeaways from an operational and financial perspective. Having a set of standards in places means that all businesses in the same industry can report in a similar way on their sustainability performance, and that interested investors can factor sustainability into their decision of how to invest.
In sum, SASB matters because it:
- Focuses industries on the most relevant ESG sustainability strategies
- Provides a clear framework for reporting
- Reduces costs associated with sustainability reporting
- Boosts a company's ESG rating
- Reduces the complexity of reporting while improving its quality
SASB vs. Other ESG Reporting Frameworks
It’s important to understand how SASB compares to other ESG reporting frameworks as well as how they can work together. For example, GRI standards emphasize broader stakeholder impact while SASB is focused on financial materiality. TCFD concentrates on climate-related financial disclosures, and SASB can enhance this with sector-specific metrics. Using multiple frameworks together provides companies with a well-rounded ESG strategy, especially as the ISSB integrated SASB and TCFD to create a unified global baseline.
Streamline SASB and ESG Reporting
After learning about SASB, companies may want to review their ESG commitments with an eye toward the relevant standard for their industry. An ESG materiality assessment can be useful in this regard.
Despite recent speculation, the SASB framework continues to play a critical role in ESG disclosure. Companies are still expected to report their sustainability initiatives using structured, industry-specific metrics, precisely the kind SASB provides! As demands for auditability and assurance increase, effective ESG reporting software is essential too. A dynamic, end-to-end solution can simplify SASB-aligned reporting, improve data accuracy, and ensure compliance with evolving standards, helping companies stay ahead of stakeholder expectations. DFIN’s end-to-end ESG reporting platform makes the process as easy as possible by streamlining data collection, benchmarking, and disclosure activities. Our software provides companies with time savings, regulatory confidence, and investor-grade transparency to ensure their success. To learn more about it, connect with one of our experts today.
