Overview
Introduced: 2011
Effective from: Ongoing (standards updated periodically)
Last modified: 2018
Region(s): Global (primarily focused on the United States)
About
The Sustainability Accounting Standards Board (SASB) provides industry-specific sustainability standards to help public companies identify and report on financially material sustainability information. SASB’s standards are designed to be integrated into mandatory SEC filings, such as 10-K forms, and are focused on the financial materiality of ESG issues.
Criteria for compliance
Entities covered
SASB standards are primarily used by publicly traded companies, especially those required to disclose financially material sustainability information in regulatory filings with the SEC. However, any company seeking to align its sustainability reporting with investor expectations can use SASB standards.
Reporting structure
SASB standards are organized by industry, with 77 identified industries grouped into 11 different sectors. This industry-specific approach ensures that the metrics are comparable across companies within a specific sector.
Compliance timelines
SASB standards are designed to be incorporated into regular financial reporting cycles, such as annual or quarterly SEC filings. There are no specific SASB-imposed deadlines beyond the existing regulatory timelines.
Disclosure requirements
Materiality focus
- SASB emphasizes the importance of disclosing financially material sustainability information. Companies must identify and report on sustainability issues that are likely to affect financial performance.
- Reports should integrate sustainability information with traditional financial metrics, ensuring that investors have a complete view of the company’s performance.
Third-party auditing
While SASB does not mandate third-party assurance, the integration of SASB metrics into SEC filings means that disclosures are subject to the same audit requirements as other financial information.
Penalties for non-compliance
Noncompliance with SASB standards does not carry specific penalties from SASB itself, but inaccurate or incomplete disclosures in SEC filings can lead to legal and financial penalties under U.S. securities law.
