With all the available investor and commercial real estate reporting frameworks, as well as mainstream-oriented reporting frameworks, sustainability reporting is now a well-known phenomenon. This may seem overwhelming to individuals who manage companies, facilities, and/or portfolios because there are so many frameworks and such a limited time.
Setting goals and adhering to a reporting framework (or frameworks) can, however, have a significant positive impact on your organization and are well worth the extra work. Enhanced shareholder and consumer support; an improved public image; increased staff confidence and commitment; decreased energy costs; and bettering the world and society’s future are just a few of these advantages. The SASB, or the Sustainability Accounting Standards Board, serves as one of the investor-focused sustainability reporting frameworks that we’ll be delving into in this blog.
We’ll look at what it is, why investors appreciate it, the framework’s fundamentals, how to start reporting, and other topics.
In order to “assist businesses throughout the world identify, monitor, and report on the environmental matters that are important most to their investors,” the non-profit SASB was established in 2011. In other words, SASB is eliminating the knowledge gaps between economic and sustainability reporting. To do this, SASB has created 77 requirements and standards that are particular to various industries and concentrate on the issues that they have identified as being the most financially significant for each of those industries. These are the “problems” that are most relevant to investors because they are reasonably expected to have a material adverse effect on a company’s financial condition or operating performance.
On the SASB website, all 77 SASB standards are available for free download. Businesses are urged to employ the standards in their individual financial reporting; there is neither a gateway nor a questionnaire.
Additionally, The SASB Materiality Map, an interactive resource that catalogues and contrasts disclosure themes across several markets and sectors, is available. In plainer terms, the map describes the key issues for any given industry or sector, assisting a company in determining which issues it should investigate and report on, as well as assisting investors in determining what areas of a business or industry to concentrate on when analyzing them. The map includes 26 sustainability-related topics divided into five categories: Human Capital, Social Capital, Leadership & Governance, Business Model & Innovation, and Environment. By concentrating on concerns most likely to affect a company financially, the list was trimmed down.
Let’s now discuss the prerequisites for SASB reporting.
Companies must be aware of what needs to be reported and exactly how to track it until they properly report the correct data. Using greenhouse gases as an instance Companies that report on their emissions must be able to monitor such emissions in order to provide accurate data. Reviewing the standards for your particular industry is therefore the initial step in the SASB reporting process. Take thorough notes on anything that applies to your firm because not everything included in the standard is sometimes applicable to it.
Then consider which data collection techniques are most appropriate. Think about the activities that produce green house gases, such as corporate operations and facility utilization or staff travel and transportation, using greenhouse gas as an example once more. Next, choose the most effective approach to measure them and start data collection.
Whenever it’s time to submit a report, combine the data and use the specified framework. Investors are then given the opportunity to review the reported data and make financial decisions using it. Despite the fact that the data sets that businesses will need to report on vary greatly by industry, they typically cover typical sustainable topics like energy management, water use, labor practices, product lifecycle management, product design, business ethics, customer privacy, and data security.
It satisfies their requirements. Investors desire consistent, comparable, and trustworthy data on sustainability criteria that are important financially. As we have already seen, this is essentially what SASB offers.
The industry-specific nature of SASB’s standards lowers reporting costs and reduces noise by revealing the most pertinent data. The standards can also be used in conjunction with other standards and frameworks, such as those offered by the IIRC and TCFD. Many businesses employ the GRI Standards in addition to the SASB Standards to satisfy the demands of varied audiences.
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