As ESG thought leader Robert Eccles noted in an article for Forbes at the start of the new year, 2020 was a standout year of progress for ESG investing. It was also a remarkable year for the Sustainability Accounting Standards Board (SASB). Having published its standard only a year prior in November 2018, throughout 2020 SASB’s influence as a leading global standard setter grew significantly.
Rights CoLab’s Paul Rissman and As You Sow’s Andy Behar have written about the success during the 2020 proxy season of resolutions asking companies to report against SASB. This timeline highlights the key events beginning in January that underpin its continuing rapid adoption by institutional investors and other standards bodies.
January: BlackRock and State Street Global Advisors publicly demand that portfolio holdings issue SASB-compliant disclosure or risk facing adverse votes on shareholder proposals and director ratification.
July: SASB and GRI announce collaboration: “Initially the collaboration will focus on delivering communication materials to help stakeholders better understand how the standards may be used concurrently.”
September: Five organizations— CDP, CDSB, GRI, IIRC and SASB—announced “a shared vision for a comprehensive corporate reporting system and our commitment to collaborate to achieve it.”
September: The International Federation of Accountants calls for the creation of an International Sustainability Standards Board alongside the International Accounting Standards Board (IASB). “We recommend that the proposed board adopt a ‘building blocks’ approach, working with and leveraging the expertise and disclosure requirements of the CDP, CDSB, GRI, IIRC and SASB.”
September: The International Financial Reporting Standards Foundation (IFRS), which oversees the IASB, announces a Consultation Paper on Sustainability Reporting, regarding the formation of an international Sustainability Standards Board (SSB). The Consultation acknowledged the five organizations (above) and stated, “It is important for an SSB to build upon the established work of the aforementioned organisations and accumulated knowledge in this area.”
October: Responding to the IFRS consultation, the Chair of the International Organization of Securities Commissions (IOSCO) Sustainable Finance Task Force wrote of the IFRS effort and the initiative of the five organizations that IOSCO is “keen to see them come together. We consider the two initiatives to be highly complementary.”
November: SASB and IIRC announce their intention to merge to form the Value Reporting Foundation. “The purpose of the Value Reporting Foundation is to merge SASB and IIRC into a credible, international organization that maintains the integrated reporting framework, advocates integrated thinking, and sets sustainability disclosure standards for enterprise value creation.” Janine Guillot, CEO of SASB, will head the combined operation.
November: CDSB responds to the merger with an intention to “incorporate our own endeavours with that of the Value Reporting Foundation, to contribute CDSB’s wealth of knowledge to the essential work of SASB and IIRC.”
November: SASB’s 55-member Investor Advisory Group (IAG), representing 12 countries and $41 trillion in assets under management, updates its commitment made to the IAG Statement, affirming that “other reporting standards and frameworks may complement SASB Standards, but are not replacements for them.”
November: The chief executive officers of Canada’s eight largest pension plans call for the adoption of SASB standards and the Task Force on Climate-related Financial Disclosures (TCFD) framework.
December: The Investment Company Institute (ICI), a global association of investment funds representing $34 trillion in AUM, announced that its board of governors has unanimously approved a statement encouraging US public companies to provide enhanced reporting on ESG factors. The statement urges companies to provide disclosure consistent with the recommendations of TCFD and SASB.
December: The Project Task Force on non-financial reporting standards of the European Corporate Reporting Lab at EFRAG (European Financial Reporting Advisory Group), mandated by the European Commission, concluded that, “Along[side] the EU momentum, there is a large number of initiatives in relation to sustainability standard-setting, with current notable convergence efforts. The Task Force welcomes these efforts and considers of prime importance to cooperate with the leading international initiatives to ensure coherence and reciprocal input between EU and other international initiatives, in order in particular to foster a global playing-field for international companies.”
January 2021: In his annual letter to CEOs, Larry Fink reaffirms BlackRock’s support for SASB, noting that, “We are greatly encouraged by the progress we have seen over the past year – a 363% increase in SASB disclosures…”
