What is SASB Standards?

What is SASB Standards?

The Sustainability Accounting Standards Board (SASB) Standards are a set of 77 industry-specific sustainability disclosure standards that identify the subset of ESG issues most likely to affect financial performance in each industry. Developed through an evidence-based research process from 2011 to 2018, SASB Standards specify disclosure topics and associated metrics tailored to industries ranging from oil and gas to software to health care delivery. SASB was consolidated into the IFRS Foundation in 2022, and its industry-specific metrics now serve as the basis for the ISSB's sector-specific guidance under IFRS S1 and S2.

Why It Matters

SASB solved a fundamental problem in ESG disclosure: the question of what's material varies dramatically by industry. Water consumption is a critical metric for a semiconductor manufacturer but largely irrelevant for a software company. Data security is paramount for a healthcare provider but secondary for a mining operation. Before SASB, sustainability reports often disclosed the same generic metrics regardless of industry, producing voluminous but unfocused reports that investors found difficult to use for comparative analysis.

SASB's materiality map identifies 26 sustainability issues across five dimensions (environment, social capital, human capital, business model and innovation, leadership and governance) and maps which issues are material for each of 77 industries classified under the Sustainable Industry Classification System (SICS). This specificity is why investors gravitated toward SASB—a 2023 survey by the CFA Institute found SASB was the framework most frequently used by investment professionals for ESG integration, ahead of TCFD and GRI.

The absorption of SASB into the IFRS Foundation and its integration with ISSB standards ensures SASB's industry metrics will endure as the backbone of sector-specific sustainability disclosure globally. IFRS S1 directs companies to consider SASB standards when identifying sustainability-related risks, opportunities, and metrics—effectively embedding SASB's industry materiality logic into the global baseline. Jurisdictions adopting ISSB standards will likely reference SASB metrics either as required or recommended sector-specific disclosures.

The practical value for companies is significant. SASB Standards typically identify 5–15 disclosure topics per industry with 10–30 associated metrics—a manageable, focused reporting scope compared to the hundreds of data points in comprehensive frameworks. This focus makes SASB an efficient starting point for companies beginning their sustainability reporting journey and a useful lens for prioritizing data collection and risk management investments.

How It Works / Key Components

Each SASB Standard is organized by industry and contains: disclosure topics (the material sustainability issues), accounting metrics (specific quantitative and qualitative measures for each topic), technical protocols (detailed guidance on measurement, scope, and definitions), and activity metrics (normalizing denominators like revenue, production volume, or employee count that enable peer comparison).

For example, the SASB Standard for Electric Utilities identifies six disclosure topics: greenhouse gas emissions and energy resource planning, air quality, water management, coal ash management, energy affordability, and grid resiliency. Under greenhouse gas emissions, the standard specifies metrics including gross global Scope 1 emissions, percentage by regulatory program, and discussion of long-term and short-term strategy to manage emissions. These metrics were selected through research demonstrating their statistical correlation with financial performance in the sector.

SASB's evidence-based development process distinguishes it from other frameworks. Each standard underwent multiple rounds of public comment, industry working group review, and quantitative analysis testing the financial materiality of proposed topics. Research teams analyzed the correlation between industry-specific ESG metrics and financial performance indicators (stock price, earnings variability, cost of capital). Topics and metrics that demonstrated statistically significant financial relevance were included; those that didn't were excluded—regardless of their broader social or environmental importance.

Since integration with the ISSB, SASB Standards are maintained and updated by ISSB staff. The board has committed to enhancing industry-specific requirements over time, starting with the industries most affected by climate transition risk. Companies should monitor updates, as metrics may be refined or added as the evidence base evolves. The SASB Standards Application Guidance helps companies navigate situations where their business spans multiple SICS industries, recommending disclosure under the standard most relevant to their primary revenue source or using multiple standards for diversified businesses.

Council Fire's Approach

Council Fire uses SASB's industry materiality framework as a foundation for helping clients identify and prioritize their most financially material sustainability issues. We guide companies through SASB-aligned disclosure preparation, connect SASB metrics to ISSB and ESRS requirements for multi-framework reporting efficiency, and help translate SASB's quantitative metrics into actionable performance improvement targets that reduce risk and create value.

Frequently Asked Questions

Are SASB Standards still relevant now that they're part of the ISSB?

More relevant than ever. SASB's industry-specific metrics are explicitly referenced in IFRS S1 as a source for identifying material sustainability topics and associated metrics. Rather than being replaced by the ISSB, SASB Standards have been elevated—they now inform the sector-specific layer of a globally mandated reporting framework. Companies should continue using SASB Standards for industry-specific disclosure while reporting under the ISSB's cross-sector requirements in IFRS S1 and S2. The ISSB has committed to maintaining and enhancing SASB Standards as an integral part of its architecture.

How do SASB Standards handle companies that operate across multiple industries?

SASB's Sustainable Industry Classification System assigns each company to a primary industry, but many companies operate across multiple sectors. The guidance recommends that diversified companies report under the SASB Standard most relevant to their primary operations or use multiple standards to cover material business segments. For conglomerates, reporting at the segment level—applying the relevant SASB Standard to each business unit—provides the most decision-useful information. The key principle is that disclosure should reflect the specific sustainability risks material to each line of business, not just the parent company's primary classification.

What's the relationship between SASB materiality and legal materiality for SEC reporting?

SASB explicitly used the U.S. Supreme Court's TSC Industries v. Northway definition of materiality—information a reasonable investor would consider important in making an investment decision—as the basis for its materiality determinations. While SASB materiality findings don't automatically constitute legal materiality under securities law (which requires company-specific analysis), they provide a well-researched, industry-specific starting point. SEC staff have referenced SASB as a resource for identifying climate-related disclosures, and many securities lawyers use SASB's materiality map to inform MD&A and risk factor analysis. The alignment between SASB's materiality framework and SEC legal standards makes it a uniquely useful tool for U.S.-listed companies.