On Wednesday, November 7, 2018, after six years of development, the world’s first industry-specific materiality-based sustainability reporting standard was published. The US-based non-profit Sustainability Accounting Standards Board (SASB) launched the global standard in Europe with the opening bell ceremony at the London Stock Exchange.
The goal of SASB’s standards is to help companies worldwide define, manage, and communicate financially material sustainability information to their investors.
Development and Content of the Standard
Behind SASB are over 2,800 international partners, investors, companies, and other market participants who have together developed a transparent way to assess companies’ financially material sustainability factors.
There are five sustainability themes in total:
- Natural resources
- Human and social capital
- Sustainable business models and product innovation
- Leadership and good governance
Under these five themes, there are a total of 26 verified sustainability issues that are considered to have a financial impact on a company’s performance. The sustainability issues are not the same for all industries but vary across 77 industries.
EU Regulation and the Future
“Since the invention of accounting, [mandatory sustainability reporting] is the biggest fundamental change happening in the financial sector.”
— EU Parliament Member Sirpa Pietikäinen, May 24, 2018
The European Commission is currently developing regulation that will make it mandatory for investors to consider sustainability themes in the future. The Commission has also recognized SASB’s reporting framework as compatible with the guidelines for reporting non-financial sustainability information.
SASB’s standard will enable transparent and standardized sustainability reporting and mutual comparison between companies and investors going forward.
Tracefi and SASB
Tracefi is SASB’s first licensed data analytics partner in the Nordics. Our operations focus on investment sustainability analysis based on SASB’s methodology.