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Sep 23, 2021

More than half of S&P Global 1200 using SASB framework

Adoption of the ESG materiality reporting framework has been swift

More than 600 companies from the S&P 1200 index now use the SASB Standards in their external communications to investors, according to an announcement from the Value Reporting Foundation.

SASB launched in 2011, working with an influential investor advisory group to help define ESG materiality on a sector-specific basis. In November 2018, it launched its 77 industry-specific standards for use by public companies.

The number of companies using the SASB Standards increased by 375 percent between 2019 and 2020, and by 215 percent between 2020 and 2021. Nearly 1,300 companies now use the SASB Standards, according to the Value Reporting Foundation. Of the S&P 1200, 608 use the standards.

In June this year, SASB completed its merger with the International Integrated Reporting Council to create the Value Reporting Foundation. Shortly after the announcement, Neil Stewart, director of corporate outreach at the Value Reporting Foundation, told IR Magazine that the merger was designed to create a more harmonious reporting landscape for issuers and that the SASB Sandards would continue in their current form.

The creation of the foundation is part of a broader effort to give issuers the resources they need to provide investors with consistent and comparable data on ESG materiality. Other notable efforts in this space include the creation of the IFRS Foundation’s International Sustainability Standards Board, the EU’s Corporate Sustainability Reporting Directive – which will quadruple the number of companies that have to adhere to EU sustainability reporting rules – and the SEC’s forthcoming rule-making on climate-related disclosures, which is expected later this year.

These efforts intend to build on the established ESG reporting landscape, which many issuers feel is overly complicated. Although organizations such as SASB, GRI, CDP and TCFD all maintain that their frameworks and standards are distinct and have different use cases, concerns over an ESG reporting alphabet soup still linger. 

In spite of these concerns, SASB has emerged as a preferred framework among some of the most influential asset managers. BlackRock, State Street and Vanguard all recommend that issuers use the SASB Standards in concert with the TCFD framework.

North America leads in SASB adoption

The SASB standards have the greatest traction in North America, based on a regional breakdown of adoption rates in the S&P Global 1200. Almost two thirds (65 percent) of the S&P 500 and 70 percent of the S&P/TSX 60 use the SASB Standards in their external reporting.

Among the S&P LATAM 40, 58 percent of companies use the standards, while just under half (48 percent) of the S&P Euro 350 does. Adoption rates are lowest in Australia and Japan, where 20 percent and 15 percent, respectively, of companies included in the local S&P major index use SASB for external reporting.

‘We are thrilled to see growing use of the SASB Standards by businesses around the world, especially amid this landmark era for sustainability disclosure and corporate reporting,’ says Janine Guillot, CEO of the Value Reporting Foundation, in a statement.

‘The Value Reporting Foundation will continue to pursue global alignment within the corporate reporting system, including participating in the IFRS Foundation Technical Readiness Working Group to inform plans for the International Sustainability Standards Board, which we wholly support.’

Click here to listen to a recent interview with Guillot on Corporate Secretary’s Governance Matters podcast.

Ben Ashwell

Ben Ashwell was the editor at IR Magazine and Corporate Secretary , covering investor relations, governance, risk and compliance. Prior to this, he was the founder and editor of Executive Talent , the global quarterly magazine from the Association of...