Sustainability Standards for US Corporate 10-K Reporting

01:59 PM, July 11, 2014

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SASB, US, Reporting

The Sustainability Accounting Standards Board (SASB) provides sustainability accounting standards for use by publicly listed corporations in the United States when disclosing material sustainability issues for the benefit of investors and the public. SASB standards are designed for disclosure in mandatory filings to the Securities and Exchange Commission (SEC), such as the 10-K and 20-F forms. SASB is an independent 501(c)3 non-profit organization and is accredited to set standards by the American National Standards Institute (ANSI).

The need for SASB

The US financial accounting system, which requires transparent disclosure of material issues to investors, plays a fundamental role in making its markets the most efficient, liquid, and resilient in the world. However, the construct for standardized financial reporting to investors was developed at a time when a company’s ability to create value was constrained largely by the ability to access financial capital.

We live in a different world now, one that has greater uncertainty, a broader range of risks and opportunities, and significant resource constraints beyond access to capital. A new standardized language is needed to articulate the material non-financial risks and opportunities facing companies today. These non-financial risks and opportunities that affect corporations’ ability to create long-term value are characterized as “sustainability” issues. Sustainability issues vary by industry because they are closely aligned with business models, the way companies compete, their use of resources, and their impact on society.

For this reason, SASB is immersed in understanding, interpreting, and measuring relevant sustainability issues at the industry level in order that they can be measured, managed, and disclosed.

What makes SASB different?

Existing sustainability reporting entities provide guidelines or frameworks. They do not follow a standard process for determining the materiality of issues within each industry, nor do they provide industry-specific performance metrics. They are not designed for concise nor integrated disclosure in 10-K or 20-F forms, which are appropriate disclosure channels to provide investors with a complete view of material financial and sustainability information.

SASB’s sustainability accounting standards are the first that truly enable comparisons of peer performance and benchmarking within an industry. SASB’s unique focus on US public equities, approaches to industry-specific issues, and disclosure of minimum performance standards differentiates it from existing sustainability frameworks.

Board of Directors

SASB’s Board of Directors is responsible for articulating and upholding the vision, values, and mission of SASB. Among its members are Michael R. Bloomberg (Founder of Bloomberg LP, and the 108th Mayor of New York City), Dr. Bob Eccles (Professor of Management Practice, Harvard Business School), Jack Ehnes (CEO, CalSTRS), and Mary Schapiro (Former Chairman, SEC).

Sector Industries Release Status
Healthcare Biotechnology, Pharmaceuticals, Medical Equipment & Supplies, Healthcare Delivery, Healthcare Distributors, Managed Care July 31, 2013 Issued
Financials Commercial Banks, Investment Banking & Brokerage, Asset Management & Custody Activities, Consumer Finance, Mortgage Finance, Security & Commodity Exchanges, Insurance February 25, 2014 Issued
Technology & Communications Electronic Manufacturing Services & Original Design Manufacturing, Software & IT Services, Hardware, Semiconductors, Telecommunications, Internet Media & Services April 2, 2014 Issued
Non-Renewable Resources Oil & Gas – Exploration & Production, Oil & Gas – Midstream, Oil & Gas – Refining & Marketing, Oil & Gas – Services, Coal Operations, Iron & Steel Producers, Metals & Mining, Construction Materials June 25, 2014 Issued
Transportation Automobiles, Auto Parts, Car Rental & Leasing, Airlines, Air Freight & Logistics, Marine Transportation, Rail Transportation, Road Transportation September 2014 Public Comment
Services Education, Professional Services, Hotels & Lodging, Casinos & Gambling, Restaurants, Leisure Facilities, Cruise Lines, Advertising & Marketing, Media Production & Distribution, Cable & Satellite December 2014 Incorporating IWG Feedback
Resource Transformation Chemicals, Aerospace & Defense, Electrical/Electronic Equipment, Industrial Machinery & Goods, Containers & Packaging February 2015 Not started
Consumption I Agricultural Products, Meat, Poultry, Dairy & Fishing, Processed Foods, Non-Alcoholic Beverages, Alcoholic Beverages, Tobacco, Household & Personal Products June 2015 Not started
Consumption II Mass Merchants, Food Retailers (& Distributors), Drug Retailers & Convenience Stores, Specialty Retailers (& Distributors), E-Commerce, Apparel, Accessories & Footwear, Home & Office Products, Leisure Products August 2015 Not started
Renewable Resources & Alternative Energy Biofuels, Solar Energy, Wind Energy, Geothermal Energy, Nuclear Energy, Renewable Energy Project Developers, Independent Power Producers & Energy Traders, Forestry & Paper November 2015 Not started
Infrastructure Water Utilities, Integrated Utilities, Electric Utilities, Gas Utilities, Waste Management, Infrastructure Construction, Architecture, Engineering & Construction, Home Builders, Real Estate Owners & Developers, Real Estate Investment Trusts April 2016 Not started


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