SASB (Sustainability Accounting Standards Board)
Definition
SASB provides industry-specific sustainability disclosure standards designed to help companies communicate financially material sustainability information to investors. Now part of the IFRS Foundation, SASB standards cover 77 industries across five dimensions: environment, social capital, human capital, business model, and leadership. They focus on the subset of ESG issues most likely to affect financial performance.
Why It Matters
SASB standards are particularly valued by investors for their financial materiality focus and industry specificity. The integration of SASB into the ISSB framework is creating a more unified global sustainability disclosure landscape.
Related Terms
ISSB (International Sustainability Standards Board)
The International Sustainability Standards Board (ISSB) was established by the IFRS Foundation to develop a global baseline of sustainability disclosure standards for the capital markets. Its inaugural standards, IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures), consolidate and build upon TCFD, SASB, and other frameworks. The ISSB aims to create consistency and comparability in sustainability reporting worldwide.
GRI (Global Reporting Initiative)
The Global Reporting Initiative (GRI) is an independent international organisation that provides the world's most widely used standards for sustainability reporting. GRI Standards help organisations report on their economic, environmental, and social impacts in a structured, comparable way. The framework emphasises stakeholder inclusiveness and materiality.
Materiality Assessment
A materiality assessment is a structured process for identifying and prioritising the ESG topics that are most significant to an organisation and its stakeholders. It typically involves stakeholder engagement, peer benchmarking, and analysis of business impact to determine which issues warrant strategic focus and disclosure. The output is usually a materiality matrix ranking topics by importance.
ESG Integration
ESG integration is the systematic inclusion of environmental, social, and governance factors into investment analysis and decision-making processes. Unlike negative screening or exclusion, ESG integration uses ESG data alongside traditional financial analysis to build a more complete picture of risk and opportunity. It is the most widely practised responsible investment approach globally.