SASB Unifies Accounting and Sustainability
Max Platoff, Sustainable Business Club, ’15
Early morning on a recent Friday, while most of my graduate classmates are contentedly dozing, our group streams into the expansive meeting room on Bloomberg’s 6th floor. Organized by the Sustainability Accounting Standards Board (SASB), the event marks the 4th release in an ambitious series of reports that will eventually provide standards of sustainability disclosure for 88 industries.
The name “SASB” – a tongue-in-cheek reference to FASB, the Financial Accounting Standards Board – is a useful mnemonic that has brought attention to this organization at the cutting edge of ESG (Environmental, Social, Governance) guidance for SEC 10-K and 20-F filings. The Delta Series has already generated interest from 55 countries. As Executive Director Jean Rogers puts it, “SASB is not about more reporting…it’s about better reporting.”
Though some seats remain empty, the attendees are impressive. The first speaker is Kevin Anton, VP and Chief Sustainability Officer of Alcoa. He explains that the company’s workplace injury rate is one tenth the manufacturing industry average and discusses plans to eliminate 100% of landfill waste by the year 2030. According to Anton, acceptance of a standardized rubric to quantify sustainability has been slow to develop, but we’ve reached a critical mass of interest and utility to make significant progress.
There is ample evidence to support Anton’s claim. Last May, Hideki Suzuki, ESG Analyst at Bloomberg, came to speak on a panel organized by the SBC in the Newman Conference Center. It is was fantastic opportunity to hear about how the firm is incorporating ESG metrics into its proprietary terminal software. Increased accessibility to this data has been a windfall to investors who want to view companies through the lens of sustainability, making it a natural choice to have Bloomberg to host the event.
Next up on the agenda is a conversation led by Jeff Smith, Catherine Dixon, and David Lynn, all partners of law firms and thought leaders in their own right. The central topic is ‘materiality’ and appropriate breadth of the term. This issue is central to SASB, which makes it a point to post the SEC’s definition at the top of its branded material:
Materiality: Information that presents a substantial likelihood that disclosure of the omitted fact would have been viewed by the ‘reasonable investor’ as significantly altering the ‘total mix’ of information made available.
Baruchians sit with rapt attention as the event concludes with Sarah Teslik, SVP of Policy and Governance at Apache. She delivers a short but powerful speech about the current state of sustainability reporting in the U.S. Her initial criticism of the redundancy, costliness, and problematic data sourcing of current disclosures is quickly followed up with glowing testimony of SASB’s work. Teslik notes the elegance of the organization’s methodology, commenting that the use of existing structures (SEC filings) make all the difference in a company’s willingness and ability to disclose material data to shareholders.
It’s a fitting end to the conference. As the guests exit, our faction wanders over to get some final thoughts from Rogers. She explains that rather than oppose other organizations’ efforts, SASB welcomes all models for sustainability disclosure, such as the Global Reporting Initiative’s (GRI) database. As the saying goes, “a rising tide lifts all boats,” and any progress in the field will benefit investors, companies, and the planet.
For more information about sustainability events, both at Baruch College and throughout the community, please visit sustainablebusinessclub.com. Don’t miss their upcoming information session with Net Impact professionals on sustainable career options this Tuesday, October 29th, at 7pm in VC 3-215.
- Q & A with ZCCI’s Matt LePere (gradbaruchian.com)
- Sustainability and systemic risk: what’s does the SEC have to say? (theguardian.com)
- The state of SASB, one year later (greenbiz.com)
- What Do ‘Sustainability’ Executives Do? Let Us Know: Survey – Bloomberg (bloomberg.com)