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SASB

Industry-specific standards for consistent sustainability reporting

The Sustainability Accounting Standards Board (SASB) is a non-profit organisation that develops standards for sustainability accounting and reporting. SASB standards focus on financially material sustainability factors that are relevant to a company’s specific industry.

For organisations using SASB as part of their sustainability reporting framework, the challenge is not understanding the standards themselves, it is applying them consistently across teams, functions and reporting cycles. Without clear internal guidance on how SASB metrics are defined, measured and recorded, data collection becomes fragmented and reporting becomes difficult to defend under scrutiny.

THE OBJECTIVE OF SASB

The standards issued by SASB are designed to provide investors with consistent and comparable information about a company’s sustainability risks and opportunities, helping them make more informed investment decisions.

According to SASB, the term “sustainability” refers to corporate activities that maintain or enhance the ability of the company to create value over the long term. Sustainability accounting reflects the governance and management of a company’s environmental and social impacts arising from the production of goods and services, as well as its governance and management of the environmental and social capital necessary to create long-term value.

THE FRAMEWORK SASB USES

The SASB’s standards are organized into 77 industry-specific sustainability accounting standards. Each standard is focused on the sustainability issues that are most material to that industry, based on research and consultation with industry experts and investors.

The SASB standards cover a wide range of sustainability issues, including environmental, social and governance (ESG) factors. Examples of sustainability issues covered include:

  • Carbon emissions and energy management for the energy sector
  • Labour practices and employee health and safety for the healthcare sector
  • Data privacy and cybersecurity for the technology sector

The SASB standards are designed to be flexible and adaptable to each company’s unique circumstances. They are also principles-based, meaning they provide a framework for companies to report on sustainability issues rather than prescribing specific metrics or disclosure requirements.

For example, within the Food & Beverage sector, the industry Food Retailers & Distributors is defined as companies engaged in wholesale and retail sale of food, beverages and agricultural products. Store formats include retail supermarkets, convenience stores, warehouse supermarkets, liquor stores, bakeries, natural food stores, specialty food stores, seafood stores and distribution centres.

The SASB standard for Food Retailers & Distributors comprises the following topics: Fleet Fuel Management, Air Emissions from Refrigeration, Energy Management, Food Waste Management, Data Security, Food Safety, Product Health & Nutrition, Product Labelling & Marketing, Labour Practices, and Management of Environmental & Social Impacts in the Supply Chain.

In addition, one or more accounting metrics have been defined for each topic. For Fleet Fuel Management, the accounting metric is the total amount of fuel consumed by the entity’s fleet vehicles in gigajoules. For Food Waste Management, the accounting metric is the total amount of food waste and unsaleable food generated in metric tons.

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THE BENEFITS OF THE SASB STANDARDS FOR COMPANIES AND INVESTORS

The SASB standards offer several benefits for companies and investors:

  • Improved communication: The SASB standards help companies communicate their sustainability performance in a way that is relevant and comparable to investors. This can lead to better-informed investment decisions and improved relationships between companies and their stakeholders.
  • Better risk management: The SASB standards can help companies identify and manage sustainability risks that could impact their financial performance. By reporting on sustainability issues, companies can also demonstrate their commitment to responsible business practices.
  • Greater transparency: The SASB standards promote greater transparency and accountability around sustainability performance. This can help build trust with stakeholders and enhance a company’s reputation.

SASB STANDARDS

The SASB standards include:

1.Disclosure topics: A minimum set of industry-specific disclosure topics reasonably likely to constitute material information and a brief description of how management or mismanagement of each topic may affect value creation.

2. Accounting metrics: A set of quantitative and/or qualitative accounting metrics intended to measure performance on each topic.

3. Technical protocols: Each accounting metric is accompanied by a technical protocol that provides guidance on definitions, scope, implementation, compilation and presentation, all of which are intended to provide suitable criteria for third-party assurance.

4. Activity metrics: A set of metrics that quantify the scale of a company’s business that are intended to be used in conjunction with accounting metrics to normalise data and facilitate comparison.

The SASB standards are intended to be used in conjunction with other reporting frameworks, such as the Global Reporting Initiative (GRI) and the Task Force on Climate-related Financial Disclosures (TCFD). Many companies use multiple reporting frameworks to provide a comprehensive view of their sustainability performance.

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COMPLIANCE WITH THE SASB FRAMEWORK

Once a company has identified the relevant SASB standards, it must ensure that it complies with them when reporting to its stakeholders. To ensure compliance with the SASB framework, companies can take several steps, including the following:

  • Establish governance and accountability: A company should establish a clear governance structure and accountability framework for SASB reporting. This should include defining roles and responsibilities, setting performance targets and establishing processes for data collection, analysis, and reporting.
  • Define materiality: Companies need to define their reporting boundaries, which include the scope of their sustainability reporting, the data sources used, and the methods used to collect and report data.
  • Set up an accounting & reporting manual: A manual provides guidance and instructions for the data collection, verification and reporting of ESG data and ensures that the reporting process is consistent, transparent and auditable. All employees are informed of requirements and can be held accountable.
  • Periodic training and awareness sessions: Companies can conduct training and awareness sessions for their employees, particularly those involved in sustainability reporting. This can help to ensure that employees are aware of the SASB standards and their requirements and are equipped with the skills and knowledge necessary to report on sustainability performance.
  • Monitor and review compliance: The company must monitor and review its compliance with the SASB standards on an ongoing basis. This may involve internal audits, external assurance and reviews of the company’s sustainability reporting practices.
  • Engage with stakeholders: A company should engage with its stakeholders, including investors, customers, employees and community members, to understand their information needs and ensure that the reporting is relevant and useful to them.

HOW FIDUGIUS SUPPORTS SASB REPORTING

Consistent SASB reporting depends on more than knowing the standards. It requires documented methodologies, clear KPI definitions and a shared framework that everyone involved in data collection can access and apply. Without that structure, data comes from different sources with different interpretations, and the resulting report is hard to verify.

The Fidugius ESG Reporting Manual centralises SASB-aligned policies, KPI definitions, accounting treatments and ESG reporting responsibilities in one structured platform. It gives finance and sustainability teams across the organisation a single source of truth for SASB reporting. Practical, searchable and ready for external assurance review.

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