Management And Accounting Web

Schooley, D. K. and D M. English. 2015. SASB: A Pathway to Sustainability Reporting in the United States. The CPA Journal (April): 22-27.

Summary by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

Social Accounting Main Page | Environmental Cost Main Page

The purpose of this paper is to discuss the advantages of reporting under the Sustainability Accounting Standards Board (SASB) standards, to examine the standards in detail, and to compare the SASB standards with those of the Global Reporting Initiative (GRI) and the International Integrated Reporting Council (IIRC).

The authors begin by stating that sustainability reporting is on the rise although only 53% of the S&P 500 provided sustainability reports in 2012. The increase is promoted by the benefits of sustainability reporting (SR) that include improved reputation, better risk management, and increased consumer and employee loyalty. However, according to an Ernst & Young 2014 survey many companies are reluctant to engage in SR because of the associated cost and complexity involved.

The SASB - A Nonprofit Established in 2011

The SASB's new standards are designed to reduce a firm's reluctance to engage in SR. The SASB's approach is to integrate sustainability information with standard financial reporting. The industry focused standards are designed to be included with filings to the SEC such as the Form 10-K. Their plan is to develop standards for more than 80 industries in 10 sectors by 2015. Standards for 6 sectors are reported in this paper including Health Care, Financial Services, Technology & Communications, Nonrenewable Resources, Transportation, and Services. The other sectors include Resource Transformation, Consumption I, Consumption II, Renewable Resources & Alternative Energy, and Infrastructure.

The SASB's Integrated Reporting

The idea underlying integrated reporting is to link an organization's mission, corporate governance, and financial, social, and environmental performance to provide more useful information to managers and to the organization's various stakeholders.

The Standards Development Process

There are three phases to the SASB's standard development process. The first phase involves gathering evidence related to material sustainability issues for an industry that includes developing a materiality map where each issue is assigned a score. The product of phase 1 is an industry brief that includes the proposed disclosures and accounting metrics.

Phase 2 includes study and feedback by an industry group made up of members from the companies, market participants, and public interest groups on the various sustainability issues.

Phase 3 involves releasing an exposure draft for 90-day public comment and feedback to be collected and incorporated into the standard. The standards council reviews this information and produces a provisional standard. After one year of feedback and update the provisional label is removed.

Principles underlying SASB Standards

Standards must be: Applicable to all investors, pertinent and relevant across an industry, focused on driving value creation, expected to bring benefits that exceed the perceived costs, actionable by companies, easily verified, objective and supports decision making, of the highest quality possible at any time, reflective of the views of stakeholders, determined to support the shift to integrated reporting, and determined to support the convergence to international accounting standards.

Standard Format

The standards format has two parts: 1. An introduction, and 2. Material sustainability topics and accounting metrics.

The introduction includes the purpose and structure of the SASB standards, an industry description, guidance for disclosure of material sustainability topics and SEC filings, users of the SASB standards, the scope of disclosure, reporting format, timing, limitations, forward-looking statements, and assurance.

Standard Setter Comparison

The Global Reporting Initiative (GRI) standards approach is focused on the company's operations and value creation to determine the sustainability issues to be reported. However the GRI standards approach is more of a one size fits all guide rather than a standard designed for a specific industry.

The International Integrated Reporting Council (IIRC) focuses on integrating the relevant sustainability issues into corporate reports but similar to the GRI provides a one-size-fits-all reporting format. See (

How Wall Street Can Help

If the SEC required sustainability information in the 10-K reports the entire global reporting landscape would change.


Related summaries:

Boer, G., M. Curtin and L. Hoyt. 1998. Environmental cost management. Management Accounting (September): 28-30, 32, 34, 36 and 38. (Summary).

Busco, C., G. Fiori, M. L. Frigo and A. Riccaboni. 2017. Sustainable development goals: Integrating sustainability initiatives with long-term value creation. Strategic Finance (September): 28-37. (Summary).

English, D. M. and D. K. Schooley. 2014. The evolution of sustainability reporting. The CPA Journal (March): 26-35. (Summary).

Esquire. 2015. America: These are your choices. Esquire (December/January): 149-153, 160-161, 164, 168. (Summary - This is a summary of ten questions related to the most critical choices for America based on information from the Brookings Institution).

Estes, R. 1992. Social accounting past and future: Should the profession lead, follow - or just get out of the way? Advances In Management Accounting (1): 97-108. (Summary).

Gleeson-White, J. 2015. Six Capitals, or Can Accountants Save the Planet?: Rethinking Capitalism for the Twenty-First Century. W. W. Norton & Company. (Note).

Handy, C. 2002. What's a business for? Harvard Business Review (December): 49-55. (Summary).

Johnson, H. T. 2006. Sustainability and "Lean Operations". Cost Management (March/April): 40-45. (Summary).

Johnson, H. T. 2012. A global system growing itself to death - and what we can do about it. The Systems Thinker (May): 2-6. (Summary).

Jones, A. III. and G. A. Jonas. 2011. Corporate social responsibility reporting: The growing need for input from the accounting profession. The CPA Journal (February): 65-71. (Summary).

Martin, J. R. Not dated. Russell Ackoff: What is a system? Videos. (Note).

Porter, M. E. and M. R. Kramer. 2006. Strategy and society: The link between competitive advantage and corporate social responsibility. Harvard Business Review (December): 78-92. (Summary).

Porter, M. E. and M. R. Kramer. 2011. Creating shared value: How to reinvent capitalism and unleash a wave of innovation and growth. Harvard Business Review (January/February): 62-77. (Summary).