glossary

SASB

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What does SASB stand for?

SASB stands for the independent non-profit organisation Sustainable Accounting Standards Board. It develops and disseminates standards for sustainability accounting and helps public organisations disclose material and decision-relevant information to investors.

What is the SASB framework?

Sustainability issues can impact a company's financial performance, but not all issues affect every industry. Accordingly, the same sustainability issue can have different impacts depending on the industry. The SASB standards are an international ESG Reporting Framework that identify the subset of sustainability issues that are most relevant to an industry's financial performance. They are available to all reporting companies and are broken down by industry. 

The topics covered relate to five dimensions of sustainability: 

- Environmental

- Social Capital

- Human Capital

- Business Model + Innovation

- Leadership + Governance

Each Standard has on average six disclosures topics and 13 accounting metrics.

How are the SASB standards used?

Climate change brings with it a number of opportunities and risks when it comes to the long-term sustainability of companies. Through the SASB Standards, companies can identify, measure and manage the long-term sustainability issues. To make investment decisions for institutional investors, they need to assess how these issues affect companies. Therefore, the use of SASB Standards can serve them as a key tool in their decision-making process.

SASB standards are a practical tool for implementing frameworks and standards such as TCFD and IIRC. Many companies also combine the SASB and GRI Standards to meet different target groups.

What is the difference between SASB and GRI?

SASB and GRI (Global Reporting Initiative) are offering both standards for sustainability reporting. Yet, they differ in their purposes and rely on different approaches to materiality.

The aim of the SASB Standards is to meet the needs of investors. In order to achieve this, it mainly focuses on ESG issues that have a material financial impact on the company. GRI, on the other hand, concentrates on a broad range of stakeholders (including investors) focusing on the economic, environmental and social impacts that a company has.

It is quite common for companies to combine the SASB and GRI Standards to meet the needs of their audience. To simplify the process for companies, the two organisations have published a joint paper.

Is SASB mandatory?

The use of SASB standards is not mandatory. Instead, they are intended to help companies determine how to report on sustainability issues that are subject to mandatory disclosures due to their financial materiality. The European Commission has recognised the SASB standards as a proven and appropriate framework.