Sustainability Accounting Standards Board

Sustainability Accounting Standards Board is a non-profit organization that develops and maintains sustainability disclosure standards for use by publicly traded companies in United States capital markets, such as the New York Stock Exchange and NASDAQ. The organization was founded in 2011 by Jean Rogers and is headquartered in San Francisco, California, with support from organizations like the Ford Foundation and the Hewlett Foundation. The board's work is informed by the principles of integrated reporting and the Global Reporting Initiative, and is guided by the expertise of professionals from companies like Microsoft, Coca-Cola, and Goldman Sachs.

Introduction

The Sustainability Accounting Standards Board is part of a broader movement towards corporate social responsibility and environmental, social, and governance (ESG) disclosure, which includes initiatives like the United Nations Environment Programme Finance Initiative and the Principles for Responsible Investment. The board's standards are designed to help investors and other stakeholders understand the sustainability performance of companies, including their management of climate change risks and opportunities, as described by the Intergovernmental Panel on Climate Change and the World Business Council for Sustainable Development. Companies like Unilever, Patagonia, and IKEA have already begun to adopt sustainable practices and disclose their ESG performance, with support from organizations like the World Wildlife Fund and the Nature Conservancy. The board's work is also informed by the research of academics from institutions like Harvard University, Stanford University, and the University of Oxford.

History

The Sustainability Accounting Standards Board was founded in 2011 by Jean Rogers, a former KPMG partner, with the goal of developing industry-specific standards for sustainability disclosure. The board's early work was supported by organizations like the Rockefeller Foundation and the Bill and Melinda Gates Foundation, and was informed by the expertise of professionals from companies like Procter & Gamble, Johnson & Johnson, and Cisco Systems. In 2012, the board launched its first set of standards, which covered industries like renewable energy, biotechnology, and financial services, with input from companies like Vestas, Genentech, and JPMorgan Chase. Since then, the board has continued to develop and refine its standards, with support from organizations like the International Finance Corporation and the World Bank.

Standards and Frameworks

The Sustainability Accounting Standards Board has developed a set of standards and frameworks for sustainability disclosure, which are designed to help companies disclose their ESG performance in a clear and consistent manner. The board's standards are industry-specific, and cover topics like greenhouse gas emissions, water management, and human rights, as described by the United Nations and the International Labour Organization. Companies like Nike, Adidas, and Levi Strauss & Co. have already begun to use the board's standards to disclose their ESG performance, with support from organizations like the Fair Labor Association and the Alliance for Water Stewardship. The board's frameworks are also informed by the principles of integrated reporting and the Global Reporting Initiative, and are guided by the expertise of professionals from companies like Shell, ExxonMobil, and Chevron.

Governance and Structure

The Sustainability Accounting Standards Board is governed by a board of directors, which includes professionals from companies like BlackRock, Vanguard, and State Street Corporation. The board is also advised by a council of experts, which includes academics from institutions like MIT, University of California, Berkeley, and the London School of Economics. The board's standards are developed through a transparent and inclusive process, which involves input from companies, investors, and other stakeholders, including organizations like the CFA Institute and the Institutional Shareholder Services. The board's work is also supported by a network of partners, including companies like SAP, Oracle, and Salesforce, and organizations like the World Economic Forum and the Clinton Foundation.

Industry Adoption and Impact

The Sustainability Accounting Standards Board's standards have been adopted by a growing number of companies, including Apple, Google, and Amazon, which are using the standards to disclose their ESG performance and manage their sustainability risks and opportunities. The board's standards have also been endorsed by investors like CalPERS and BlackRock, which are using the standards to evaluate the ESG performance of their portfolio companies, with support from organizations like the Investor Network on Climate Risk and the United Nations-supported Principles for Responsible Investment. The board's work has also been recognized by organizations like the World Business Council for Sustainable Development and the International Organization for Standardization, which have praised the board's efforts to promote sustainability disclosure and corporate social responsibility.

Criticisms and Challenges

Despite its progress, the Sustainability Accounting Standards Board has faced criticisms and challenges, including concerns about the complexity and cost of implementing the board's standards, as expressed by companies like Walmart and McDonald's. Some critics have also argued that the board's standards do not go far enough in promoting sustainability disclosure and corporate social responsibility, as argued by organizations like the Sierra Club and the Rainforest Action Network. The board has responded to these criticisms by refining its standards and providing guidance and support to companies, with input from organizations like the Environmental Defense Fund and the Natural Resources Defense Council. The board's work is also informed by the research of academics from institutions like Yale University, University of Chicago, and the University of Cambridge.