A Material World
As the number of sustainability reporting frameworks expands, practitioners are struggling to make sense of the options. Meanwhile, industry experts are scrambling to declare a winner.
At the COMMIT!Forum 2013, BrownFlynn outlined the important details of the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) and demonstrated that they are complementary frameworks. The expanded use of each, whether individually or combined, is a positive trend for all stakeholders.
These are exciting times for reporters. SASB recently released its first standard (healthcare) for sustainability reporting to be disclosed in public companies’ Form 10-K. A second standard (financial institutions) is on the near horizon, likely to be released February 25, 2014. The GRI G4 Guidelines came out in May 2013, with reporters asked to conform after December 2015. The details outlined below are helpful to keep in mind as companies formulate their respective strategies for 2014 and beyond.
Reporting Scope and Target Audiences
The SASB Standards intend to provide “a view into the information needs of the reasonable investor” and represent the results of extensive industry research on sustainability disclosures. According to SASB, the regulatory framework for mandatory sustainability disclosure already exists in Regulation S-K, the regulation that “sets the specific disclosure requirements associated with Form 10-K and other SEC filings.” Regulation S-K “requires that companies describe known trends, demands, and uncertainties that have a material impact on
financial results” and many environmental and social impacts have a material impact on financial results. We suspect many companies in the healthcare industry are assessing the SASB standards and some leaders will include SASB metrics in their SEC filings next year.
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