For decades, companies reported on profits and losses without mentioning the environmental and social impacts tied to their operations. Investors looking for clarity on climate risk, labor practices, or resource use were left piecing together inconsistent data. The Sustainability Accounting Standards Board (SASB) emerged to change that.
By creating clear, industry-specific sustainability reporting standards, SASB transformed the conversation: sustainability wasn’t just a matter of ethics — it was a matter of financial performance and long-term resilience.
Why SASB Was Created
In the early 2000s, sustainability reporting was growing, but it was inconsistent. Companies produced glossy CSR (corporate social responsibility) reports, but most lacked standardized metrics. Investors struggled to compare one company’s environmental claims with another’s.
The gap was clear:
- Businesses faced pressure to disclose ESG (environmental, social, governance) risks.
- Investors wanted to know how those risks impacted financial outcomes.
- No consistent framework existed to connect sustainability with financial materiality.
Founded in 2011, SASB’s mission was to close that gap by building a set of standards that tied sustainability directly to investor decision-making.
What SASB Does
SASB’s central focus was financial materiality. Unlike broad frameworks that cover all aspects of sustainability, SASB zeroed in on the issues that matter most to a company’s bottom line and investor confidence.
Industry-Specific Standards
SASB created 77 unique standards across industries, recognizing that sustainability risks are not one-size-fits-all:
- Apparel, Footwear & Accessories: Supply chain labor rights, water use in textiles, chemical safety.
- Automotive: Fuel economy, emissions reduction, materials sourcing.
- Banking: Climate risk exposure in lending, cybersecurity, financial inclusion.
- Technology & Internet Services: Data privacy, energy use in data centers, conflict mineral sourcing.
- Food & Beverage: Packaging waste, agricultural emissions, product safety.
Each standard identified disclosure topics and metrics, such as:
- Tons of COâ‚‚ equivalent emissions.
- Percentage of products made with recycled materials.
- Data breaches per million users.
- Employee turnover and injury rates.
This gave investors a way to compare companies on the same sustainability factors that could impact performance.
Real-World Adoption of SASB
By the late 2010s, SASB had become one of the most widely adopted sustainability frameworks in the world:
- Global Reach: Companies in over 70 countries referenced SASB standards in their reporting.
- Investor Support: By 2020, investors representing $70 trillion in assets supported SASB. BlackRock, State Street, and other asset managers encouraged companies to use SASB standards.
- Corporate Adoption: Well-known companies like Nike, GM, and Microsoft integrated SASB standards into their annual sustainability disclosures.
These adoptions marked a turning point — sustainability metrics had moved from the marketing department to the boardroom and investor reports.
SASB and Other Frameworks
SASB wasn’t alone in shaping sustainability reporting. To understand its role, it helps to compare it with other major frameworks:
- GRI (Global Reporting Initiative): Broader, stakeholder-focused, covering environmental and social impacts from multiple angles.
- TCFD (Task Force on Climate-Related Financial Disclosures): Narrower, focused on climate risk and financial disclosure.
- SASB: Investor-focused, highlighting financially material ESG issues for each industry.
Together, these frameworks began converging toward global standards.
From SASB to ISSB
- 2021: SASB merged with the International Integrated Reporting Council (IIRC) to form the Value Reporting Foundation (VRF).
- 2022: The VRF was consolidated into the IFRS Foundation, home of global accounting standards.
- 2022–2023: The International Sustainability Standards Board (ISSB) was created, adopting SASB’s principles into a global baseline.
Today, SASB’s work continues through ISSB, which is establishing internationally recognized sustainability disclosure standards.
The Criticisms and Limitations of SASB
Like any framework, SASB faced challenges:
- Too Investor-Centric? Critics argued it focused too much on financial materiality, overlooking impacts important to communities and ecosystems.
- Voluntary Use: SASB wasn’t legally required, so adoption varied widely by company and geography.
- Complexity: With 77 standards, implementation was resource-intensive for smaller businesses.
Still, SASB was widely respected as a practical tool to make sustainability reporting comparable and actionable.
Why SASB Matters Today
Even as it evolves under ISSB, SASB’s legacy matters because it:
- Connected sustainability with risk management and financial performance.
- Shifted sustainability from a “soft” CSR practice to a hard business metric.
- Laid the groundwork for mandatory sustainability disclosure in markets worldwide.
For investors, SASB provided confidence. For companies, it raised accountability. For the world, it showed that financial health and sustainability cannot be separated.
Practical Takeaways
For businesses:
- Use SASB (or now ISSB) to identify the ESG issues most critical to your industry.
- Integrate sustainability metrics into financial planning — not just PR.
For investors:
- Look for companies reporting against SASB/ISSB standards for reliable ESG insights.
- Compare firms in the same sector on consistent metrics.
For individuals:
- When evaluating companies, check if they report with SASB or ISSB — it signals accountability and transparency.
Final Thoughts
The Sustainability Accounting Standards Board (SASB) redefined how companies communicate about sustainability. By tying ESG issues directly to financial outcomes, it made sustainability reporting part of the mainstream investment landscape.
Now carried forward under the ISSB, SASB’s influence is global — and growing. The shift it sparked reminds us that sustainability is not just a moral choice. It is a financial, systemic, and planetary necessity. As standards evolve, the ripple effects of SASB’s work will continue to shape a future where business success and sustainability go hand in hand.
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