SASB Standards: what they are and how they fit into the ISSB

The SASB Standards are a set of sector-specific standards that tell each industry which sustainability information is financially relevant to investors. Since 2022 they have been governed by the ISSB within the IFRS Foundation, and they are being progressively integrated into the industry guidance of IFRS S2.

What is SASB and why is it important?

SASB (the Sustainability Accounting Standards Board) was created in the United States in 2011 with one aim: to develop industry-specific sustainability accounting standards focused on what affects a company's financial value.

Its distinctive feature is the focus on financial materiality: the SASB Standards concentrate on the ESG matters that have a demonstrable economic impact in each sector and that matter to investors. The importance of SASB lies in its ability to:

• Speak the investor's language: it translates sustainability performance into information relevant to financial decision-making.
• Standardise disclosure: it offers comparable metrics that make it easier to compare companies within the same sector.
• Focus on what is material: it cuts the noise and prioritises the few topics that genuinely move value in each industry.

Who governs the SASB Standards today?

This is the point that has changed the most and the one worth being clear about. SASB is no longer an independent organisation:

• In 2021 it merged with the International Integrated Reporting Council (IIRC) to create the Value Reporting Foundation (VRF).
• In 2022, the VRF was consolidated into the IFRS Foundation, the same body that oversees international accounting standards.
• Since then, the SASB Standards have been the responsibility of the International Sustainability Standards Board (ISSB).

The ISSB maintains the SASB Standards and is progressively updating them to align their terminology and improve interoperability. In practice, SASB's sector methodology has become the basis of the industry-based guidance for applying IFRS S2, the standard on climate-related disclosures. That is why, today, SASB and the ISSB are not alternatives but parts of the same system.

How the SASB Standards are structured

The SASB Standards are built on the system's own sector classification, the Sustainable Industry Classification System (SICS), which groups companies by their shared sustainability risks and opportunities. Their key principles are:

• Financial materiality: the information must be relevant to the financial situation and to investor decisions.
• Sector specificity: there is a standard for each industry, with its own topics and metrics.
• Global applicability: the metrics are designed to be comparable internationally.

Sectors and industries covered

The system covers 77 industries grouped into 11 sectors. Each standard includes only a small number of disclosure topics (around half a dozen on average), precisely those considered financially material for that industry. The main sector groups include, among others:

• Consumer goods.
• Financials.
• Services.
• Transportation.
• Health care.
• Technology and communications.
• Food and beverage.
• Renewable resources and alternative energy.
• Extractives and minerals processing.
• Resource transformation.
• Infrastructure.

Benefits of the SASB Standards for companies

Applying the SASB Standards brings clear advantages:

• Attracting responsible investment: investors value transparency on financially relevant ESG risks.
• Easier benchmarking: it lets a company measure itself against its sector peers.
• Identifying risks and opportunities: it helps anticipate issues that could affect the business.
• Better stakeholder communication: it provides a common, verifiable language.
• Stronger reputation: it demonstrates a commitment to financial transparency and sustainability.

How to implement the SASB Standards in your company

Implementation calls for a structured approach:

1. Identify your sector standard: determine which SICS industry matches your activity and which material topics apply.
2. Assess your starting point: review your current performance against those topics.
3. Set measurable objectives: establish clear improvement goals.
4. Design a work plan: specify actions, owners and deadlines.
5. Train the team: educate staff on the standards and their application.
6. Monitor progress: review the indicators periodically and adjust the plan.

Tools such as Manglai's make it easier to collect data and calculate the environmental metrics needed for many of these disclosures.

The SASB Standards versus other sustainability frameworks

The SASB Standards are compatible with, and complementary to, other reference frameworks.

SASB and GRI

• SASB: sector-specific standards focused on financial materiality and on information relevant to investors.
• GRI: a broader framework, applicable to all sectors, that addresses a wider range of economic, environmental and social impacts (an impact-oriented approach).

SASB and the ISSB (IFRS S1 and S2)

• SASB: provides the sector basis of topics and metrics.
• IFRS S1 and IFRS S2: the ISSB's global standards for sustainability- and climate-related financial disclosure, which use the industry guidance derived from SASB.

SASB and TCFD

• SASB: financially material disclosure by sector.
• TCFD: a framework of climate-related risks and opportunities. The task force was disbanded in 2023 and its recommendations were absorbed into the ISSB standards (IFRS S2), with the IFRS Foundation taking over the monitoring role.

SASB and CDP

• SASB: financial information relevant to investors.
• CDP: a disclosure platform focused on climate, water and forests through questionnaires.

SASB and the European CSRD

For companies with an international footprint, it is worth knowing that SASB and the European framework coexist. The CSRD and the ESRS have been designed to seek interoperability with the ISSB standards, so a company can reuse much of its information across both systems instead of duplicating effort.

We help you prepare your sustainability information

At Manglai, as specialists in carbon footprint measurement and in the GHG Protocol and ISO 14064, we help you gather reliable data, analyse your environmental impact and prepare the information required by frameworks such as SASB, the ISSB or the CSRD. If your goal is to report to investors with verifiable data, you can rely on our sustainability reporting solution.