Strategic CSR & Social Accounting

Sustainability Accounting Standards Board (SASB)

 

SASB was created in response to the demand for industry indicators; the need was identified in research on responsible investing as well as industry-specific material issues and their associated performance indicators (SASB, 2014). They are continuing the trend of high quality disclosure through moving beyond traditional accounting and further incorporating environmental, social, and governance factors (ESG), which are designed to complement traditional financial accounting.  Their missions overall promote long-term value and sustainability. Their target is publicly held businesses. The businesses are required to disclose material factors in compliance with SEC requirements; however, they are moving toward a new consideration of “material.” Materiality will now incorporate environmental, social, and governance impacts that influence a business’s true value. Currently, they have issued standards for the health care, financials, and technology and communication sectors with others in progress and many more to come. They are creating standards at the industry level. The difference between SASB and this particular research is that they are focusing on issues from an external point of view, whereas the goal of this project is to work from inside the business out, incorporating strategy and paralleling a strategic social aspect with the business’s objectives. However, this is an excellent example of the continuing demand and transition toward businesses being accountable and incorporating social concerns into the work place.

 

SASB is not the only organization pushing for socially responsible businesses. Some of the other players, changes, and requirements in the game include:

• Global Reporting Initiative (GRI)

• Emergency Planning and Community Right-to-Know Act (EPCRA)

• Sarbanes-Oxley Act (SOX)

• The Mandatory Reporting of Greenhouse Gases rule (40 CFR Part 9)

• NYSE Euronext joined the United Nations’ Sustainable Stock Exchanges (SSE) Initiative

• S&P Dow Jones Indices and RobecoSAM launched a new range of diversified sustainable indices

• The New York Stock Exchange adopts corporate governance rules

• NYSE Governance Services launches suite of integrated resources for private and public companies looking to advance their corporate governance, risk, ethics, and compliance practices