Taking advantage of SASB industry standards for sustainability reporting

It is through the materiality process that organisations define the set of issues they disclose within their sustainability report. For most organisations, their material topics will cover a range of issues, which may include climate risk.

Therefore, as organisations identify their material topics, such as human capital, access to capital, governance, and climate risk, they must understand the disclosure requirements associated with the material topics they have identified.

IFRS S2 (Climate-related Disclosures) is the first topical standard issued by the ISSB (International Sustainability Standards Board), and plans are in place to issue many more topical standards in the future.

However, for organisations that may have identified additional material topics besides climate-related risks and opportunities, they must understand where to get guidance on the disclosure requirements for these additional material topics.

IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) includes guidance on how organisations determine the specific disclosure requirements for the additional material topics identified.

The SASB standards play an essential role in this regard. The SASB standards are an important source for organisations in identifying sustainability-related risks and opportunities, including the related disclosures.

They provide investors with relevant information on sustainability-related issues across up to 77 industries. Therefore, the SASB standards are a critical resource for organisations as they prepare for the implementation of IFRS S1 and IFRS S2.

For an effective and efficient implementation of IFRS sustainability reporting, organisations must leverage the existing and robust industry-based guidance of the SASB standards when determining the disclosures on their material topics.

The best practice approach is for organisations to use the SASB standards as the starting point when determining the disclosures for their material topics.

This approach ensures that organisations can quickly understand the global baseline disclosure requirements applicable to specific issues affecting their industry.

As a result, it provides a benchmarking assessment for the material topics already identified by the organisation, along with the accompanying disclosures, particularly the metrics and targets applied by the organisation.

Akinyemi Awodumila is a Partner at PwC Kenya. He is an author who writes and speaks widely on corporate reporting topics