Collaboration is an integral aspect of SASB’s mission and goals. SASB seeks to gain wisdom and insight across people and organizations in many industries with diverse perspectives. To avoid duplicating the efforts of others, SASB is engaging many different experts and integrate their best ideas to form the basis of its accounting standards. These working partnerships, which embody SASB’s values of openness and cooperation, facilitate the standardization of best in class sustainability accounting standards.
Where does SASB fit in?
The following diagram provides a visual representation of how SASB relates to existing regulatory, accounting, and reporting organizations.
(click image to enlarge)
Relationship to the SEC
According to the SEC, material risks must be disclosed in SEC filings such as the Form 10-K and 20-F for the benefit of investors. SASB is providing definitive guidance regarding the treatment and accounting of industry specific sustainability risks in support of the SEC.
Relationship to GRI, IIRC and GISR
SASB is developing industry-specific sustainability accounting standards for use in the SEC Form 10-K and 20-F. As such, SASB standards represent a minimum effective standard for disclosure. They are compatible with the broader principles and approach to integrated reporting as advanced by the IIRC.
Although SASB maintains a U.S. focus, supporting the SEC and capital markets, the sustainability accounting standards are being developed with an eye toward international relevance and harmonization. U.S. publicly listed companies that are also GRI reporters will easily be able to incorporate SASB’s sustainability accounting standards into their Form 10-K and 20-F for SEC disclosure.
SASB is currently engaged in a pilot project with GISR, providing information on material issues by industry in order that GISR may consider materiality in development of its open source sustainability ratings system.
Collaboration with the Initiative for Responsible Investment (IRI)
The IRI at Harvard University is working in close collaboration with SASB in three important ways.
- The IRI is conducting research into the methods for determining non-financial materiality, such that a generally accepted view can be arrived at, suitable for use by the financial accounting and non-financial accounting professionals.
- The IRI provided guiding principles by which the sustainability accounting standards are developed, ensuring consistency across all industries.
- The IRI convened the first Standards Council on behalf of SASB. The Standards Council is part of the standards development process and consists of industry experts with experience in sustainability research, analysis, disclosure, and standards setting. The Standards Council is responsible for ensuring that the Industry Working Group process was conducted in an open, balanced, and transparent manner, with involvement from appropriate expertise. They will approve the final industry sustainability accounting standards for issuance.