April 15, 2019

When SASB started, part of its mission was to encourage companies to make material sustainability disclosures in their financial filings like the 10K. However, following feedback from issuers and investors, SASB’s views have evolved on where disclosures should be made. We talked with Madelyn Antoncic, the new CEO of the SASB Foundation, to find out why.

Note: The terms sustainability and ESG are used interchangeably throughout this interview.


This is an interview with SASB. NYSE presents the information for informational purposes, but does not endorse, represent nor warrant the accuracy of the narrative, which relies solely on material provided by SASB.

Can you talk about the recent shift in SASB guidance around where sustainability filings should be made?

Madelyn Antoncic: Over the past six years, while SASB was developing the standards, we engaged with thousands of corporate professionals and investors, and we heard over and over that the quality of a company's Environmental, Social & Governance (ESG) data is far more important than the disclosure location.

During this period, we also began to see that there is great interest in SASB's standards around the world, and not just in the United States. For example, the European Union has recognized SASB's standards as a framework for implementing the EU Directive on Non-financial and Diversity Information, but SASB's initial focus on the 10-K and 20-F gave the impression to companies outside the US that SASB standards weren't for them.

Two things that make SASB standards unique – they are industry specific (and not country specific), and they focus on financially material information – also make them globally relevant. The material issues facing an industry in Germany or Japan are not fundamentally different from those in the US. SASB standards focus on sustainability information that is financially material—a fundamental concept important to investors and companies around the world.

However, we recognize that many stakeholders perceive SASB as solely focused on the US and our language over the years has supported that impression. We are working to change this perception and respond to the growing global interest in SASB's work. Already, every other download of the SASB standards comes from outside the US.

Based on market feedback, we formally changed our mission in early 2018 to reflect this growing global need and demand for standardized ESG data aimed at investors.

If investors are less concerned with where the information lives, what is it they are concerned most with?

MA: Investors need data that is decision useful, so that means data that is consistent, comparable and reliable. Much ESG and sustainability information is currently available publicly, but it can be difficult for investors to identify and assess which information is most useful for making investment decisions.

SASB standards can help as they were developed with investors in mind: SASB standards identify ESG issues that are reasonably likely to impact the financial condition or operating performance of a company, and therefore critical for investors to know and understand.

Regardless of where a company decides to disclose its sustainability information, SASB believes the governance processes and internal controls (including management participation and Board oversight) should be similar to those used for traditional financial reporting.

Do you have a view on web-based disclosures that are updated throughout the year versus annual Corporate Responsibility Reports?

MA:We do not have a view or preference on one format versus the other. We know that today, companies have many ways of communicating with investors, from public filings to sustainability reports published on a company's investor relations website page, and we see the use of SASB standards across these media.

Whether a company reports their ESG data continuously online throughout the year or just once annually, what is most important is the quality of the data and information disclosed.

For a company that is just starting to think about sustainability disclosure, what advice would you give them?

MA: Every company is unique, so we recommend engaging with shareholders to better understand their needs. Investors today can obtain ESG and sustainability data on companies from a variety of sources, which they then use for investment and voting decisions. By communicating ESG and sustainability performance using SASB standards, companies can make sure investors have a more complete and more accurate picture of their sustainability performance – and that's valuable for both companies and investors.

We suggest companies start their reporting journey at SASB.org where they can download the standards and case studies filled with insights and learnings from leading companies and investors who have already started using SASB standards.

Another good resource is the SASB Materiality Map, an interactive tool one can use to look up industry's disclosure topics and metrics, and also identify and compare disclosure topics across different industries and sectors.SASB's Engagement Guide for Asset Owners and Asset Managers can also be a valuable resource for companies just starting to think about sustainability disclosures. Although the guide is primarily designed for shareholders, it can also help corporate professionals—such as boards of directors, senior executives, investor relations personnel, and others—better understand the evolving expectations of investors and prepare for constructive dialogue.