SASB’s standard-setting process is designed to surface the sustainability factors most likely to materially impact the financial condition or operating performance of companies in a given industry. As such, the standards are well-suited to serve as a valuable input to a company’s existing approach to identifying, assessing, managing, and monitoring risks and opportunities. To begin this process, a company may wish to:
- Gain an understanding of SASB’s terminology and the structure of SASB’s
- Identify the company’s industry (or industries), using SASB’s Sustainable
Industry Classification System® (SICS®)
- Review SASB standards for the industry (or industries) most relevant to your
- Determine which industry standards and disclosure topics apply to your
Broadly speaking, SASB uses the word “sustainability” to refer to corporate activities that maintain or enhance the ability of a company to create long-term shareholder value. SASB groups such activities into five “sustainability dimensions”: the environment, human capital, social capital, business model and innovation, and leadership and governance. Sustainability accounting refers to the measurement, management, and reporting of such activities. Of course, the specific activities that drive long-term value creation will necessarily vary from one industry to the next, as well as from company to company. As a result, identifying what a given corporation should disclose requires thoughtful consideration of key issues within the context of the organization’s unique circumstances. SASB standards are intended to be a useful guide to this process.