There are several different ESG reporting standards to choose from, but one of the most popular, the SASB will see its future play a pivotal role in aligning ESG standards around the world. But what is SASB, and how is it used?
What is SASB?
The Sustainability Accounting Standards Board (SASB) is a non-profit organisation established in 2011 by Jean Rogers, the former global head of ESG at Blackstone’s investment management division. SASB’s primary focus is setting standards for sustainability accounting and reporting among public companies globally.
What are the SASB guidelines?
The SASB’s standards give companies a blueprint, or framework to disclose meaningful sustainability information to their stakeholders, including investors, regulators, and the public. The standards cover a broad range of sustainability issues related to financially material factors, such as climate change, human rights, and supply chain management, and are updated regularly to reflect emerging trends and best practices.

Overall, SASB’s work is critical in promoting sustainable business practices and increasing transparency and accountability in corporate reporting. By encouraging companies to incorporate sustainability factors into their financial reporting, these standards help to build a more sustainable and resilient global economy.
What are financially material sustainability factors?
The SASB defines financially material sustainability factors as those that significantly impact a company’s financial performance in terms of risks or opportunities.
One example of a material impact risk on a company is the cost of complying with new environmental regulations. For instance, if a new law requires companies to reduce their carbon emissions, a company that fails to comply may face fines, reputational damage, or legal liabilities, which will in some way hurt the company’s financial performance.
On the other hand, a company that proactively addresses the issue may benefit from reduced operational costs, improved efficiency, and enhanced brand reputation. For companies operating in industries with high carbon emissions, managing and disclosing their environmental impact is likely to be a financially material sustainability factor that can significantly impact their financial performance.
The SASB website includes a Materiality Finder which offers users a way to explore and compare materiality impacts between different industries.
The relationship between the ISSB and SASB
As of August 2022, the International Sustainability Standards Board (ISSB) of the IFRS Foundation assumed responsibility for the SASB Standards as a result of a merger between the IFRS Foundation and the SASB’s parent body, the Value Reporting Foundation.
The ISSB aims to provide much needed consistency to the sustainability disclosure landscape. The board has committed to build on existing industry-based standards and has already incorporated the SASB Standards into its initial IFRS S1 and IFRS S2 exposure drafts this year, but the effective date is still undetermined.
In May, the ISSB voted to issue a methodology for updating the SASB legacy standards to make them more relevant to an international audience.
Should I still use the SASB standards?
Since the SASB is now under the control of the ISSB, you may be wondering if the standards are still relevant. According to the SASB:
- Companies already using the SASB Standards should continue to do so
- Those who haven’t adopted them yet should still consider doing so
This is because the ISSB will incorporate the SASB standards into its IFRS S1 and IFRS S2 standards later this year.
For those new to sustainability disclosure, by using the SASB standards in 2023, it presents an opportunity to get ready for the future application of the IFRS standards.
You can already take steps to prepare for these upcoming standards, including the following three ways:
- Evaluate internal systems and processes for collecting, aggregating and validating sustainability-related information across the organisation and value chain.
- Consider the sustainability-related risks and opportunities that affect the business.
- Review the ISSB’s proposed standards (IFRS 1 & IFRS 2) and supporting materials, including the SASB Standards, CDSB Framework, TCFD
What is the difference between SASB and GRI?
The Global Reporting Initiative (GRI) and the SASB are the two most commonly used frameworks and standard setting agencies, but they have their differences.
- GRI, established in 1997, provides a global, sector-agnostic disclosure standard focusing on the organisation’s impact on the economy, environment, and society for a company’s impact on stakeholders.
- SASB takes more of a financial materiality-based approach to sustainability disclosure, focusing on the financial impacts of ESG issues on a company across 77 industry-specific areas.
Although some may prefer one framework over the other, the GRI and SASB are complementary and mutually supportive frameworks. Many companies use a combination of the two to meet the information needs of audiences.
Doubling down on their alignment, GRI and SASB issued a guide in April 2021, recommending the use of both frameworks for effective reporting. GRI serves as the general disclosure guideline, while SASB provides data-driven information for investors and providers of financial capital.
The need for SASB standards
The sustainability accounting standards framework is important for businesses for several reasons.
- It provides a clear and concise way for companies to report on their sustainability performance and risks, which is becoming increasingly influential to investors, customers, employees, and other stakeholders.
- By focusing on financially material factors, the SASB framework helps companies to prioritise their sustainability efforts and investments based on their potential impact on their financial performance.
- By aligning with the SASB standards, companies can better position themselves to meet the expectations of investors, regulators, and other stakeholders, and to comply with emerging sustainability reporting requirements.
In conclusion
The SASB standards will play a crucial role in the ISSB’s upcoming IFRS S1 and IFRS S2 standards. This move towards standardisation is a response to concerns from investors about the fragmented and inconsistent sustainability reporting standards currently in use across the industry.
By adopting the SASB standards today, companies can be forward thinking in providing their stakeholders – including investors, regulators, and the public – with relevant and insightful sustainability information. This increased transparency helps drive a more targeted and focused approach to sustainability, which ultimately supports the development of sustainable businesses.