In recent years, the importance of Environmental, Social, and Governance (ESG) factors in business has become increasingly apparent. Investors and other stakeholders are looking beyond financial performance and considering a company’s impact on society and the environment. To help companies report on their ESG performance in a standardised and comparable way, the Sustainability Accounting Standards Board (SASB) has developed a framework of industry-specific sustainability accounting standards.

What is SASB?

SASB is a non-profit organisation that aims to improve sustainability disclosures and help companies communicate their sustainability performance to investors in a standardised way. The organisation has developed a set of industry-specific standards that help companies identify and report on the sustainability issues that are most relevant to their industry.

Who Does the SASB framework Concern?

SASB concerns investors, regulators, and other stakeholders who are interested in a company’s sustainability performance. By reporting on their ESG performance using SASB standards, companies can provide investors and other stakeholders with more comprehensive and comparable information about their sustainability performance.

SASB standards are designed to be relevant to all publicly traded companies or large companies, regardless of their size or location. The standards cover a range of industries, including healthcare, technology, and consumer goods. Companies in these industries are required to report on their sustainability performance using the SASB standards, either as part of their annual reports or as standalone sustainability reports.

Metrics

The SASB framework provides a set of sustainability accounting standards that are designed to be industry-specific and financially material. These standards define a set of metrics that companies can use to report on their sustainability performance in a standardised way. The metrics are grouped into five categories, and will differ according to the sectors in which a company is active in:

Environment

These metrics measure a company's impact on the environment, such as:

• GHG emissions intensity (metric tons CO2e per unit of production)
• Water withdrawal intensity (cubic meters per unit of production)
• Waste generated (metric tons per unit of production)
• Hazardous waste generated (metric tons per unit of production)
• Renewable energy use (percentage of total energy consumed)

Social Capital

These metrics measure a company's impact on the communities in which it operates, including :

• Employee engagement (percentage of employees who report high levels of job satisfaction)
• Occupational health and safety incidents (total number of work-related injuries and illnesses)
• Customer satisfaction (percentage of customers who report high levels of satisfaction with the company's products or services)
• Data privacy and security (number of data breaches or incidents involving the unauthorised access or use of personal information)
• Community relations (amount of charitable donations and volunteer hours contributed by the company)

Human Capital

These metrics measure a company's impact on its employees, including:

• Employee turnover (percentage of employees who leave the company each year)
• Diversity and inclusion (percentage of employees who identify as women, minorities, or members of other underrepresented groups)
• Employee training and development (total number of hours of training and professional development provided to employees)
• Health and wellness (percentage of employees who participate in wellness programs or have access to on-site healthcare)
• Labor practices (number of labor violations or disputes)

Business Model and Innovation

These metrics measure a company's ability to innovate and create value over the long term, including:

• Research and development (total amount of spending on research and development activities)
• Intellectual property protection (number of patents, trademarks, or other intellectual property assets held by the company)
• Product safety and quality (number of recalls or product safety incidents)
• Innovation pipeline (percentage of revenue generated by products or services launched in the past 3 years)
• Supply chain management (percentage of suppliers who have signed the company's supplier code of conduct)

Leadership and Governance

These metrics measure a company's governance structure, executive compensation, ethics, and transparency.

• Board diversity (percentage of board members who identify as women or minorities)
• Executive compensation (total compensation paid to top executives as a multiple of median employee compensation)
• Political spending and lobbying (total amount spent on political contributions or lobbying activities)
• Ethics and compliance (number of ethics violations or compliance issues)
• Risk management (number of risk assessments conducted and actions taken to address identified risks)

The full list is available on the SASB website, via the SASB Materiality Map.