In September 2020, five leading framework and standard-setting organizations—CDP, CDSB, GRI, IIRC and SASB—announced a shared vision for a comprehensive corporate reporting system that includes both financial accounting and sustainability disclosure, connected via integrated reporting.
The joint statement outlines how existing sustainability standards and frameworks can complement generally accepted financial accounting principles (Financial GAAP). Read more about the joint statement and its significance.
In December 2020, the “group of five” published a prototype climate-related financial disclosure standard that illustrates how the concepts from our joint paper can be applied to climate disclosure and consolidates content and metrics into one practical guide.
As outlined in these joint statements, these five frameworks and standards offer complementary approaches. These frameworks and standards are designed for unique sets of stakeholders and are based on unique definitions of materiality. Companies can use different frameworks and standards as building blocks to develop a system of disclosure tailored to the unique needs of their stakeholders. Within this system, SASB Standards fill the need for ESG disclosure tailored to investors and other providers of financial capital.
SASB Standards are designed for communication by companies to investors about how sustainability issues impact long-term enterprise value. SASB Standards can be used by companies as a practical tool for implementing the principles-based framework recommended by the Task Force for Climate-related Financial Disclosures (TCFD).
Similarly, SASB Standards enable robust implementation of the Integrated Reporting <IR> Framework, providing the comparability sought by investors.
Other sustainability-related disclosure frameworks serve their own unique purposes, and ultimately, companies must evaluate and decide which tools serve their communications objectives and meet the needs of their key stakeholders.
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