SASB’s deep consultation process on the Provisional Standards and proposed updates is going “full speed ahead.” We invite corporate issuers and investors interested in participating to reach out to schedule a consultative meeting.
Since the publication of the final set of SASB Provisional Standards in April 2016, SASB’s standard-setting team has focused their work on ensuring that the standards are material, decision-useful, cost-effective, and made “by the market, for the market.” I’m going to tell you a little about that process, where we are now, and how you can participate.
To start, SASB’s sector analysts thoughtfully re-examined the Provisional Standards industry-by-industry. Each analyst developed an hypothesis on which Provisional Standards and Metrics might need modification, which should be examined for dropping from the Standards, and which new issues or topics might merit adding a Standard. Simultaneously, the analysts developed their plan for engaging with market participants to get informed feedback on the Provisional Standards and proposed changes. That deep engagement with the market began in Q3 2016, and picked up in earnest in Q4.
The analysts targeted almost 350 companies, totaling approximately $17 Trillion in market cap (as-of 9/30/16), for consultation across the 11 SICS sectors we cover. By the end of 2016, we had begun engagement with 235 of those companies ($12.4T in cap), 151 ($7.0T) directly, and 84 ($5.4T) indirectly, typically through industry associations. We have already received robust consultative feedback on the Provisional Standards and proposed changes from many of these companies and industry associations, and we continue to hold meetings with those and others.
We have also started a similar process with the investment community, working with SASB’s Investment Advisory Group (IAG) members (with a combined AUM total of $20T) and other asset managers, asset owners, and capital market participants (such as ratings agencies and independent analysts). These leading investors and asset owners are providing their views on the Standards to ensure that the investment community will find them decision-useful in determining performance on material sustainability issues.
As the final part of the consultation phase, SASB is inspecting its approach on several key cross-cutting issues like Climate, Human Capital, and Governance to ensure alignment in how we treat them across industries. We are discussing these issues with 3rd-party experts, as well as the issuers and investors already involved in the consultation process.
The formal process of deep consultation will continue through April 1, 2017. Please contact a sector analyst to schedule a meeting to provide feedback before then. We want your voice to be heard, and this will be the last opportunity to communicate directly with the analysts before we move to the next phases of the Codification process.
Michael Kinstlick is SASB’s Head of Standard-Setting.