CFOs in Asia Pacific: Will you Adopt Industry-Specific Sustainability Accounting Standards?

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The Sustainability Accounting Standards Board (SASB) said it has recently published the world’s first set of industry-specific sustainability accounting standards covering financially material issues.

Covering 77 industries, the standards mark a six-year effort by the board to draft accounting standards that address environmental and societal issues.

Global in nature, the standards can be used to comply with regulatory requirements in certain jurisdictions, such as the European Union’s directive on non-financial disclosures, according to SASB.

The purpose of the standards is not primarily to satisfy reporting and accounting requirements but to provide useful additional information to investors, Hales noted. The goal is for companies to provide reliable statements to capital providers, said SASB Chair Jeffrey Hales.

“What makes SASB standards unique in the marketplace is their focus on industry specificity and financial materiality, universal concepts that are important for investors and businesses around the world,” said SASB Chair Jeffrey Hales. “This is an important milestone for global capital markets. Companies and investors around the world now have codified, market-based standards for measuring, managing, and reporting on sustainability factors that drive value and affect financial performance.”

Companies including GM, Merck, Nike, Kellogg’s, JetBlue, CBRE, Diageo, Groupe PSA, Schneider Electric, Host Hotels, and NRG Energy have begun using the SASB standards, the board pointed out.

As corporate users have demonstrated, SASB standards can be used alongside other sustainability frameworks, the board said.

“For example, the standards are well-aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and are complementary to the Global Reporting Initiative (GRI),” Hales noted.

SASB said it will follow a regular, multi-year cycle of standards updates to ensure the standards remain relevant and responsive to evolving market needs.