The Sustainability Accounting Standards Board (SASB) is a non-profit organization that develops and maintains sustainability accounting standards for companies to disclose their environmental, social, and governance (ESG) performance. The SASB standards are designed to help investors make informed decisions about the companies they invest in based on their ESG performance. In this article, we will discuss what you need to know about the future of SASB standards for disclosures.
The SASB standards were first introduced in 2011 and have since gained significant traction among investors and companies. The standards cover 77 industries and provide guidance on the ESG issues that are most material to each industry. The SASB standards are voluntary, but many companies have started to adopt them as a way to demonstrate their commitment to sustainability and attract socially responsible investors.
In recent years, there has been a growing demand for standardized ESG disclosures from investors, regulators, and other stakeholders. The SASB standards have emerged as one of the leading frameworks for ESG disclosures, alongside other frameworks such as the Global Reporting Initiative (GRI) and the Task Force on Climate-related Financial Disclosures (TCFD).
The future of SASB standards for disclosures looks promising, as more companies are expected to adopt them in the coming years. In fact, a recent survey by the Governance & Accountability Institute found that 90% of S&P 500 companies now publish sustainability reports, and 86% of those reports reference the SASB standards.
One of the key drivers of the adoption of SASB standards is the increasing pressure from investors for companies to disclose their ESG performance. According to a survey by Morgan Stanley, 85% of individual investors are interested in sustainable investing, and 71% of institutional investors consider ESG factors when making investment decisions.
Another driver of the adoption of SASB standards is the growing regulatory scrutiny of ESG disclosures. In the US, the Securities and Exchange Commission (SEC) has recently announced that it will be reviewing its ESG disclosure requirements, and the Department of Labor has proposed a rule that would limit the use of ESG factors in retirement plan investments. The SASB standards provide a clear and consistent framework for companies to disclose their ESG performance, which can help them comply with regulatory requirements.
The future of SASB standards for disclosures also includes ongoing updates and revisions to the standards. The SASB is committed to regularly reviewing and updating the standards to ensure they remain relevant and effective. In fact, the SASB recently released an updated version of its standards, which includes new metrics and disclosures related to climate risk, human capital management, and other ESG issues.
In conclusion, the future of SASB standards for disclosures looks bright, as more companies adopt them to demonstrate their commitment to sustainability and attract socially responsible investors. The growing demand for standardized ESG disclosures from investors and regulators is also expected to drive the adoption of SASB standards. As the SASB continues to update and revise its standards, they will remain a leading framework for ESG disclosures.
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