What’s in a Sustainability Accounting Standard?
SASB will develop a sustainability accounting standard for each of the 88 SICS industries. Each standard will consist of Performance Indicators and Management disclosures, grouped into Impacts and Innovation Opportunities. (See graphic below).
The standards are based on performance metrics and management disclosures that are commonly tracked and reported on in the industry. Where there are no common metrics or disclosures, SASB will create them. By creating an industry based standard, SASB is streamlining the reporting process.
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Performance Indicator Criteria
As part of the process of developing the standards, SASB will evaluate possible performance indicators against the following criteria:
- Relevant: Adequately describes performance related to the material issue, or is a proxy for performance
- Useful: Provides decision-useful information to companies and investors
- Applicable: The KPI is applicable to most companies in the industry
- Cost-effective: The data are already collected by most companies or can be collected in a timely manner and at a reasonable cost
- Comparable: The data allow for peer-to-peer benchmarking within the industry
- Complete: Individually, or as a set, the indicator provides enough information to understand and interpret performance associated with the material issue
- Directional: The KPI provides clarity about whether an increase/decrease in the numerical value signals improved/worsened performance
- Auditable: The data underlying this KPI can be verified
Example Sustainability Accounting Standard
The following graphic provides an illustrative example of what the Airline Industry sustainability accounting standard might look like.
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