SASB Standards: Industry-Specific Sustainability Disclosure

What It Is

SASB (Sustainability Accounting Standards Board) Standards identify the subset of sustainability issues most likely to affect the financial condition or operating performance of companies within each of 77 industries. Originally developed by the SASB Foundation (established 2011, standards published 2018), SASB Standards are now maintained by the ISSB after the consolidation of the Value Reporting Foundation into the IFRS Foundation in 2022.

SASB's distinctive feature is industry specificity. Rather than providing a universal set of sustainability topics, SASB identifies the specific sustainability issues that are financially material for each industry and provides standardized, quantitative metrics for disclosure. A software company faces different material sustainability issues than a mining company, and SASB's standards reflect these differences.

Each SASB Standard identifies disclosure topics (the sustainability issues material to the industry) and accounting metrics (the specific quantitative and qualitative metrics for each topic). For example, the Electric Utilities standard identifies topics like GHG emissions, air quality, water management, coal ash management, and end-use efficiency, with specific metrics for each.

SASB metrics are designed for comparability — standardized definitions, units, and calculation methodologies enable investor comparison across companies within an industry.

Who Uses It

• U.S.-listed companies — SASB was designed for SEC-reporting companies and is widely used in 10-K and 20-F filings
• Companies adopting ISSB — SASB Standards serve as the industry-specific implementation guidance for IFRS S1
• Institutional investors — Bloomberg, MSCI, and other data providers integrate SASB metrics; investors use SASB for ESG analysis and engagement
• Companies seeking focused ESG disclosure — SASB's industry-specific approach helps companies prioritize the sustainability issues investors care about most
• Companies reporting to multiple frameworks — SASB metrics often overlap with CDP, GRI, and ISSB requirements, enabling efficient multi-framework reporting

Key Requirements

Each SASB industry standard includes:

1. Disclosure topics — typically 4-8 sustainability issues identified as financially material for the industry through evidence-based research and market testing
2. Accounting metrics — quantitative and qualitative metrics for each disclosure topic, with standardized definitions and calculation methodologies
3. Technical protocols — detailed guidance on data collection, calculation, and presentation for each metric
4. Activity metrics — industry-specific normalization factors (revenue, production volume, number of employees) that provide context for sustainability performance

Companies are expected to disclose against all metrics in their industry standard, or explain why specific metrics are not applicable or material.

How to Implement

Phase 1: Identify Applicable Standard (1-2 weeks) Determine your SICS industry classification. For diversified companies, identify standards for each significant business segment. Review the standard's disclosure topics and metrics.

Phase 2: Materiality Assessment (1-2 months) Validate SASB's industry materiality map against your company's specific circumstances. While SASB has pre-identified material topics, companies may determine that additional topics are material or that certain SASB topics are not applicable.

Phase 3: Data Collection (2-4 months) Collect data for each metric per the technical protocol. Establish data ownership, collection processes, and quality controls. For first-time reporters, this typically reveals data gaps requiring new collection processes.

Phase 4: Disclosure (1-2 months) Prepare SASB-aligned disclosures. Common publication vehicles include standalone sustainability reports, annual report supplements, SEC filings (10-K), and ISSB reports. Include the SASB index mapping metrics to their location in the report.

Relationship to Other Frameworks

ISSB: SASB Standards are explicitly referenced as industry-specific guidance under IFRS S1. Companies implementing ISSB should use their applicable SASB Standards as the starting point for identifying material sustainability topics and selecting metrics.

GRI: SASB and GRI are complementary — SASB for financial materiality, GRI for impact materiality. Many companies report under both. Mapping exercises show significant metric overlap, enabling efficient dual reporting.

CDP: Many SASB metrics correspond to CDP questionnaire data points. Companies already disclosing through CDP have much of the data needed for SASB reporting.

TCFD: SASB metrics feed into TCFD's Metrics & Targets pillar, providing industry-specific climate and sustainability metrics.

Why It Matters

SASB matters because it answers the specific question investors ask: "Which sustainability issues could affect this company's financial performance, and how is the company managing them?" By providing standardized, industry-specific, quantitative metrics, SASB enables the kind of systematic analysis that financial analysts and portfolio managers need to integrate sustainability into investment decisions.

With SASB's integration into ISSB, these industry-specific standards are becoming part of the global regulatory disclosure architecture. Companies that have already built SASB reporting capabilities have a significant head start on ISSB compliance. Companies that haven't should view SASB implementation as the most direct path to meeting investor expectations and preparing for mandatory disclosure requirements.