NEW YORK, Dec. 19, 2019 /PRNewswire/ -- The Sustainability Accounting Standards Board (SASB) recently announced four new projects to address key issues raised through the evidence-based research and market consultation that drive its standard-setting process. The Standards Board added to its standard-setting agenda two projects related to systemic risk in the Asset Management & Custody Activities industry and tailings management in the Extractives & Minerals Processing sector. It also expanded its research program to explore content moderation on Internet platforms and risks and opportunities related to plastics in the Chemicals and Pulp & Paper Products industries.
"The sustainability issues most likely to impact a company's financial performance are dynamic, so some may evolve over time and new ones may emerge," said Standards Board Chair Jeff Hales. "Our process is designed to capture those changes so that SASB's industry-specific standards can evolve alongside the market and continue to deliver financially material, decision-useful information to investors."
In carrying out the two new standard-setting projects, the SASB staff will evaluate the relevant industry standards against research and consultation findings and formulate a recommendation to the Standards Board that may result in updates to the standards. Responding to market input, as well as and a changing regulatory environment and product trends in the Asset Management & Custody Activities industry, the staff will review the scope of the Systemic Risk Management topic and associated metrics to ensure they are globally applicable in capturing a company's ability to absorb shocks arising from financial and economic stress and meet evolving regulatory requirements related to the complexity and interconnectedness of companies in the industry. Similarly, in the wake of increased investor attention and regulatory scrutiny resulting from high-profile incidents, the staff will evaluate the issue of tailings facility management in the Metals & Mining and Coal Operations industries for possible revision to the topic's scope or its associated performance metrics.
"The fact that these issues continue to turn up in headlines on a regular basis is a clear reflection of the fact that they are matters of increasing concern, and that includes careful consideration by capital markets participants," said Director of Research – Standards Bryan Esterly. "It's essential to SASB's work that we ensure the standards are up to the task of facilitating effective communication between companies and investors on these key topics."
The two new research projects also address issues of increasing public debate—and potentially factors in corporate valuation and investment risk. Technology companies, including Internet platforms, are grappling with the questions of whether and how to moderate and manage user-generated content, political ads, and other third-party content hosted on their platforms. Meanwhile, intensifying focus on the environmental impacts of plastics has escalated regulation and shifted customer demand for packaging with potentially significant implications for companies in the Chemicals and Pulp & Paper Products industries. These projects join a third project covering human capital management, which was added to SASB's research program in September. SASB staff will undertake investigation, analysis, and information gathering with the goal of delivering a recommendation to the Standards Board on whether to proceed to standard-setting in these areas.
SASB's rigorous standard-setting process involves evidence-based research, broad and balanced stakeholder participation, public transparency, and independent oversight and direction from the Standards Board. SASB approaches updates to the standards using a project-based model, enabling focused standard-setting to effectively address key issues. This model gives SASB the ability to address broad themes, regulatory changes, and other trends which affect multiple sectors. The SASB staff coordinates research and consultation efforts within and across sectors, ensuring that companies and investors play a vital role in identifying and evaluating the topics, metrics, and technical protocols included in the standards. Market outreach consists of formal engagement with investors, companies, and other subject matter experts. SASB also regularly engages with the Standards Advisory Group (SAG), which is comprised of volunteer industry participants who advise SASB on standards implementation and emerging issues that could be considered in the standards development process.
The Sustainability Accounting Standards Board (SASB) Foundation, which supports and oversees the Standards Board, is an independent, nonprofit international standard-setting organization that develops and maintains robust reporting standards that enable businesses around the world to identify, manage, and communicate financially material sustainability information to investors. SASB standards are evidence based, developed with broad market participation, and are designed to be cost-effective for companies and decision-useful for investors. To download any of the 77 industry-specific standards, or learn more about SASB, please visit SASB.org.
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