The IFRS Foundation Trustees created the International Sustainability Standards Board (ISSB) to respond to an urgent demand for transparent financial-related sustainability disclosures by companies. The ISSB is committed to building on the work of existing investor-focused reporting initiatives—such as SASB Standards—to deliver a global baseline for sustainability disclosures to the capital markets.
SASB Standards enable organisations to provide industry-based sustainability disclosures about risks and opportunities that affect enterprise value. In August 2022, the IFRS Foundation assumed responsibility for SASB Standards when it merged with the Value Reporting Foundation (VRF), the global nonprofit that previously maintained these Standards.
SASB Standards identify the subset of environmental, social and governance issues most relevant to financial performance and enterprise value for 77 industries. The Standards were developed using a rigorous and transparent standard-setting process that included:
- evidence-based research;
- broad and balanced participation from companies, investors and subject-matter experts; and
- oversight and approval from the independent SASB Standards Board.
Global investors recognise SASB Standards as essential requirements for companies seeking to make consistent and comparable sustainability disclosures.
The ISSB has committed to building on the industry-based SASB Standards and adopting SASB’s industry-based approach to standards development1. SASB Standards play an important role in the Climate-related Disclosures Exposure Draft and the General Requirements for Sustainability-related Disclosures Exposure Draft. The ISSB encourages companies and investors to continue to support and use the SASB Standards until they are replaced by IFRS Sustainability Disclosure Standards.
The SASB Standards XBRL Taxonomy
In October 2021 the VRF published the SASB Standards eXtensible Business Reporting Language (XBRL) taxonomy, developed with the support of PwC. The purpose of the SASB XBRL Taxonomy is to enhance the quality and usefulness of disclosures required by SASB Standards by integrating the Standards with XBRL, the common language for digital business reporting.
Listed companies that produce annual financial reports in regions with XBRL mandates are likely to be familiar with XBRL. The SASB XBRL Taxonomy is:
- compatible with base taxonomies for financial accounting standards; and
- accessible to organisations seeking to adopt it for their sustainability reporting.
Many corporate reporting software providers and auditors already collect and report data in the XBRL format and are interested in reporting sustainability information in the same format.
1 The development of IFRS Sustainability Disclosure Standards is subject to due process.
