As global leaders convene in New York this week for the United Nations Climate Summit, it’s clear that now is a time for action. The more than 100 satellite events that comprise Climate Week involve government, business, and civil society working together to discuss solutions to one of our world’s most daunting problems.
Making traction on an issue as big as climate change will require the power of all capital. In order to evaluate climate risk, investors need comparable information on corporate performance. Only with comparable information can investors push capital to seek the most broadly positive results for society—and avoid the negative ones.
Companies and investors are increasingly recognizing climate risk and the need for climate disclosure. As a result, the SEC published Guidance Regarding Disclosure Related to Climate Change in February 2010. The guidance—which set expectations for companies to report on material regulatory, physical, and indirect risks and opportunities related to climate change—signaled the SEC’s acknowledgment of climate risk. However, in order to use sustainability information, investors need complete data sets and comparable data they can use to benchmark and compare companies. This is where SASB comes in.
SASB addresses climate change by identifying industries where climate change is material (either from an emissions or vulnerability perspective), so that portfolios can be addressed in terms of the risks and opportunities associated with climate change. SASB also translates climate change into actionable metrics by which companies and investors can benchmark and gauge progress.
Because climate change affects each industry in a unique way, SASB standards provide companies and analysts with specific, decision-useful information to manage and value such impacts. For example:
- SASB’s climate metrics for Health Care Delivery include how companies address the need for added and/or flexible capacity due to influx of patients from climate-related events such as hurricanes, flooding, or heat-related illness
- SASB’s climate related metrics for Software & IT Services include the integration of environmental considerations—such as energy-efficiency standards, layout, design, and regional factors—into strategic planning for data centers.
- SASB’s climate metrics for Investment Banking include the deal size of advisory and underwriting transactions for companies in Energy/Oil&Gas, Materials/Basic Materials, Industrials, and Utilities.
- SASB’s climate metrics for Oil & Gas Exploration & Production include the estimated carbon dioxide emissions embedded in proven hydrocarbon reserves.
Explore the SASB Materiality Map to learn how climate change manifests across industries.