Transcript Document

Sustainability Accounting Standards Board
Industry-Based Standards to Guide Disclosure and Action on Material
Sustainability Issues
July 17, 2015
Marisa Mackey
Associate Director
Confidential Draft © SASB 2012
Sustainability Accounting Standards Board
The Sustainability Accounting
Standards Board is an
independent US-based 501(c)3
non-profit engaged in the
development of sustainability
accounting standards for use by
publicly-listed corporations in
disclosing material sustainability
issues in standard filings for the
benefit of investors and the public.
SASB is accredited to establish
sustainability accounting
standards by the American
National Standards
Institute (ANSI). SASB is not
affiliated with FASB, GASB, IASB
or any other accounting standards
boards.
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© 2013 SASB™
Standards
Development
Corporate
Piloting
Program
Education
and
Certification
Research Publications
and Licensing
CONFIDENTIAL & PROPRIETARY
Board of Directors
Robert G. Eccles, PhD*
Harvard Business School
Steven Gunders
Retired – Deloitte LLP
Daniel Hanson, CFA
Jarislowsky Fraser
John Katovich**
Katovich & Kassan Law Group, former Pacific Stock Exchange
Erika Karp
UBS
Suz MacCormac***
Morrison & Foerster LLP
Steve Lydenberg, CFA
Domini Social Investments LLC & Initiative for Responsible Investing, Harvard
University
Catherine Odelbo
Morningstar
Aulana L. Peters
Retired – Gibson Dunn & Crutcher LLP,
former SEC Commissioner
Jean Rogers, PhD^
Sustainability Accounting Standards Board
Anne Sheehan****
CalSTRS
Ed Waitzer
Stikeman Elliott LLP, former Ontario Securities Commission
*Chairman, ** Treasurer, ***Secretary, ****Vice-Chair, ^Ex-Officio
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© 2013 SASB™
CONFIDENTIAL & PROPRIETARY
Investors
Advisory Council
Barbara Boigegrain
Valerie Brow n
Verity Chegar
Audrey Choi
Eileen Cohen
Sam Di Piazza
Michelle Edkins
General Board of Pension
& Health Benefits, United
Methodist Church
Alliance Bernstein
Allianz Global Investors
Morgan Stanley
JP Morgan
Citi
Blackrock
John Fullerton
David Gottf ried
David Hazan
Melissa Epperly
Matt Hennessy
R. Paul Herman
Bruce Kahn
Capital Institute
Regenerative Ventures
New Albion Partners LLC
The Anchorage Group
Trem ont Equity Advisors
HIP Investor
Deutsche Bank
Adam Kanzer
Stephen Kibsey
Peter S. Knight
Rob McGarrah
Andy Matteis
Chris McKnett
Margaret Moore
Dom ini Social Investm ent
La Caisse
Generation Investm ent
AFL-CIO
Pyram is Global Advisors
State Street Global
Advisors
Goldm an Sachs
Janet Pegg
Diana Propper
Curtis Ravenel
Cheryl Smith
Byron Walker
Jill Watz
Martin Whittaker
UBS
Expansion Capital
Bloom berg LP
Trillium
UBS – Retired
Vulcan
Sonen Capital
Hampton Bridw ell
Todd Camp
Marcus Chung
John Edelman
Bob Ew ing
Andrea Fernandez
Jessica Fox
BrandLogic
The Hershey Com pany
The Children’s Place
Edelm an
Weyerhaeuser
Arup
EPRI
Beth Holzman
Jef f Hynds
Dr. Rodney Irw in
Cecily Joseph
Erica Isaacson
Margaret Kohn
Elizabeth Lascelle
The Tim berland Co.
Ingersoll Rand
World Business Council
Sustainable Developm ent
Sym antec
Edelm an
Merck & Co.
Johnson & Johnson
Tom Murcott
Angela Nahikian
Jeanne Chi Yun Ng
Ronald Nielsen
Laura Nishikaw a
Tom Schneberger
PJ Simmons
Gale International
Steelcase
CLP Pow er
Cliffs NR
MSCI
FMC
Corporate EcoForum
Dante Tedaldi
Fern Thomas
Matteo Tonello
Christina Vernon
Conrad Walters
David Westman
SAIC
Christies – Form er
The Conference Board
Carolinas Healthcare
System
UPS
ConEdison
Bill Baue
Aaron Bernstein
Helen Brand
Mark Campanale
Todd Cort
Stephen Davis
Ira Feldman
Independent
Harvard Law School
ACCA
Halloran Philanthropies
Tw o Tom orrow s
Yale University
Greentrack
Jennif er Francis
Ralf Frank
Gil Friend
Dan Geiger
Bahar Gidw ani
Ted Grant
James Haw ley
Duke University
DVFA
Natural Logic
USGBC
CSRHub
AccountAbility
St. Mary’s College
Toby Heaps
Bob Herz
Eric Hespenheide
John Hodges
Rachel Jackson
Kirsty Jenkinson
Keith Johnson
Corporate Knights
FASB – Form er
Deloitte
BSR
ACCA
WRI
Reinhart Boerner Van
Deuren
Edw ard Kamonjoh
Namrita Kapur
Holly Kauf man
Cary Kroskinsy
Mike Krzus
Rob Lake
Brendan LeBlanc
ISS
Environm ental Defense
Fund
Environm ent & Enterprise
Strategies
Netw ork for Sustainable
Financial Markets
Grant Thornton – Retired
UNPRI
Ernst & Young
Glen Low
Rob Ludke
Jo Mackness
Joel Makow er
Lenny Mendonca
Anthony Miller
Andrea Mof f at
BluSkye
Hill & Know lton Strategies
Haas School of Business
Green Biz Group
McKinsey & Co.
UNCTAD
CERES
Charlie Moore
Marcy Murninghan
Michael Muyot
Michael Nicholus
Kathy Nieland
Matt Orsagh
Jeremy Osborne
CECP
The Murninghan Post
CRD Analytics
Accenture
Pw C
CFA Institute
Ernst & Young
Dan Pingaro
Karl Pf alzgraf
Janet Ranganathan
Kathee Rebernak
Mark Serw inow ski
Jef f rey Smith
Kate Starr
Sailors for the Sea
BPA Associates
WRI
Fram ew ork LLC
MetaVu
Crow ell & Moring LLP
Heron Foundation
Mike Starr
Ralph Taylor
Peter Templeton
Stephen Viederman
Steve Walker
Michael Wall
Allen White
SEC-Form er
Metanoia Fund
GBCI
Jessie Sm ith Noyes
Foundation- Retired
World 50
NRDC
Tellus and GISR
John Wilson
Public Interest/Intermediaries
Corporations &
Trade Associations
TIAA-CREF
4 Cindy Williams7/17/2015
University of Illinois
Alan Willis
© 2013 SASB™
Andrew
Alan Willis & Associates
CONFIDENTIAL &Lisa
PROPRIETARY
Winston
Woll
Eco-Strategies
US SIF
Advisors on this list serve as individuals; the organizations listed alongside SASB Advisors are
for affiliation purposes only. No past or current organizational endorsement of SASB is hereby
The most stable markets in the world…
Founded in the US in 1973, The Financial Accounting
Standards Board takes responsibility for establishing
Generally Accepted Accounting Principles, or GAAP,
on behalf of the SEC.
The SEC mandates certain content and disclosures in
SEC filings, such as audited financial statements and
Management’s Discussion and Analysis (MD&A).
These filings, and the standards that underlie them,
play a fundamental role in making our markets the
most efficient, liquid, and resilient in the world.
A primary goal of United States securities laws is to promote
honest and efficient markets and informed investment decisions
through full and fair disclosure of material issues.
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© 2012 SASB™
CONFIDENTIAL & PROPRIETARY
A changing world
 Corporate growth and success are no
longer constrained solely by the availability
of financial capital.
 Global resource constraints and
management of environmental and social
issues are integral to the long term
success and sustainable value creation of
companies.
 Inadequate pricing of externalities present
a skewed view of performance for
resource intensive companies.
Growth
The world population is increasingly urban
Global population by type of area and by region:
1950-2050
Source: UN Population Division, World Population
Prospects: The 2008 Revision, 2008
The world could be running out of some
resources
Global supply forecasts according to the implied ultimate recoverable
resources of conventional oil, date of peak production and the postpeak aggregate decline rate
 Governments are less able to regulate the
complex interactions, dependencies, and
impacts of companies on society.
Source: World Bank, Global Economic Prospects, 2007
Reporting to investors and the public must reflect a balanced view of risks
and opportunities across all forms of capital a company employs.
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CONFIDENTIAL & PROPRIETARY
Changing valuations
Components of S&P 500 Market Value
100%
80%
60%
40%
20%
0%
1975
1985
Intangible Assets
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1995
2005
Tangible Assests
CONFIDENTIAL & PROPRIETARY
2010
Source: Ocean Tomo
Intangibles
ESG data are quantifiable, just in different terms
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CONFIDENTIAL & PROPRIETARY
SASB Complements other established frameworks and initiatives
Global
IIRC
SEC
Principles for Integrated
Reporting
GRI
Global issues, voluntary
guidelines
Protecting Investors
FASB
SASB provides
guidance on the
materiality of
sustainability
issues for
mandatory
disclosure to
investors
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SASB covers
sector specific
issues for all
industries
GISR
SASB
Financial Accounting
Standards
US Based
SASB provides
minimum content
requirements for
integrated
reporting
Sustainability Accounting
Standards
SASB
develops
language for
standardized
disclosure of
material, nonfinancial
impacts
© 2012 SASB™
Ratings System
Industry KPIs
SASB establishes
industry KPIs for use
by ratings agencies
and analysts
CONFIDENTIAL & PROPRIETARY
Materiality Matters
SEC materiality

Rule 12b-2

Rule 12b-20

Rule 10b-5

Rule 210.1-02
(Regulation S-X)

Rule 210.4-01 (a)

(Regulation S-X)

Rule 210.4-02
(Regulation S-X)

Item 101, 103, and 303
(Regulation S-K)

Staff Accounting
Bulletin No. 99
The Supreme Court’s Definition
“Material information” is defined as presenting a
substantial likelihood that the disclosure of the
omitted fact would have been viewed by the
reasonable investor as having significantly
altered the “total mix” of information made
available.
(TSC Indus. V. Northway, Inc., 426 U.S. 438 (1976) and Basic v.
Levinson, 485 U.S. 224 (1988))
SASB adheres to the materiality of information requiring disclosure as defined by
U.S. regulation, SEC rulings, and judicial review, effectively bridging the gap
between financial reporting and sustainability reporting. An integrated view of
materiality is essential for integrated reporting.
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CONFIDENTIAL & PROPRIETARY
SEC, FASB and SASB
US GAAP
Integrated Reporting
SASB Materiality Map
and KPIs
SASB completes the picture on corporate performance
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CONFIDENTIAL & PROPRIETARY
Supporting Investors in Decision Making
Sustainable Industry
Classification System
Materiality Map
Key Performance Indicators
SICS
Sector Allocation
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Portfolio Risk
© 2013 SASB™
CONFIDENTIAL & PROPRIETARY
Benchmarking
Performance
Creating a race to the top
Comparable information in a public eye will encourage companies to compete on
key dimensions of sustainability, and investors to drive capital to the most
sustainable outcomes.
SASB KPIs
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CONFIDENTIAL & PROPRIETARY
Supply and Demand
Clear value propositions for companies and investors.
Investors
Companies




Cost Effective
Relevant and Actionable
Levels the Playing Field
Minimizes Questionnaire
Fatigue
 Integrated Reporting
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





Fiduciary Duty
Floats All the Boats
Ease of Access
Free of Charge
Allows Benchmarking
Supports all types of
Investment Strategies
CONFIDENTIAL & PROPRIETARY
10 Sectors in 10 Quarters
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Time Frame
Sector
# of Industries
Q4, 2012
Health Care Services
6
Q1, 2013
Financials
7
Q2, 2013
Technology & Communication
5
Q3, 2013
Non-Renewable Resources
11
Q4, 2013
Transportation
9
Q1, 2014
Services
10
Q2, 2014
Resource Transformation
5
Q3, 2014
Consumption
17
Q4, 2014
Renewable Resources & Alt. Energy
8
Q1, 2015
Infrastructure
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© 2013 SASB™
CONFIDENTIAL & PROPRIETARY
Industry Working Groups
2
Q1
SASB Implementation Schedule
J
F
1
2
0
1
Q2
M A M
3
4
5
2
2
Q3
Q4
Q1
J
J
A
S
O
N
D
J
F
6
7
8
9
10
11
12
1
2
0
1
Q2
M A M
3
4
5
3
2
Q3
Q4
Q1
J
J
A
S
O
N
D
J
F
6
7
8
9
10
11
12
1
2
0
1
Q2
M A M
3
4
5
A
S
O
N
D
J
F
6
7
8
9
10
11
12
1
2
(# of Industries within sector) SICS Sector
(7) Financials
3
(11) Non-renewable Resources
4
(10) Technology & Communications
5
(17) Consumption
6
(2) Renewable Resources
7
(13) Transport
8
(12) Services
9
(9) Resource Transformation
10
(18) Infrastructure
Legend
Grey
Salmon
Ongoing Preparation & Recruitment Phase
Green
3 Month Intensive Development Phase
1 Month SASB Preparation Phase
Yellow
6 Month Refinement Phase
MM or KPI Published
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© 2012 SASB™
Q1
J
Recruit and Liaise Industry Working Groups
2
Q4
J
Master Materiality Map (All Sectors)
(5) Health Care
2
Q3
Preperation
1
4
CONFIDENTIAL & PROPRIETARY
0
1
J
J
A
S
O
N
D
6
7
8
9
10
11
12
Q2
M A M
3
4
5
5
Q3
Q4
SASB’s rigorous, ANSI compliant standards setting process
Launch of
IWG Forum
Prior Work
• Recruit
IWGs
• Liaise
with
Industry
Groups
Standards
Council
Process
Review
IWG Forum
Disbanded
Industry
Research
Review
Material Issues
KPI
Harvesting
Prepare
Strawmen
IWG Review
Prepare Draft for
Public Comment
30 Day
Comment
SASB
SASB
SASB
SASB
IWG Forum
SASB
Public
4-Month Preparation Phase
Prepare final draft of KPIs
for Standards Council
30 Days
SASB
Standards
Council Review
of draft standards
after comment
2-Month Intensive
Development Phase
Finalization of KPIs for all industries
in a sector and release preparation
30 Days
SASB
Stds. Council
3-Month Refinement Phase (Continued)
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© 2012 SASB™
CONFIDENTIAL & PROPRIETARY
Response to
Comments
30 Days
SASB
3-Month Refinement
KPIs
Release of
Sector KPIs
for Public
use and
Industry pilot
Health Care Preliminary Results
Biotechnology
Medical Equipment &
Supplies
Pharmaceuticals
Health Care Delivery
Distributors & PBMs
Managed Care
Materiality
Environmental
 Pharmaceutical water
contamination
 Resource efficiency
 Disease migration
 Genetically modified
organisms
Social
 Access-to-Medicines
 Drug safety & side effects
 Safety of clinical trial
participants
 Affordability & fair pricing
 Ethical marketing
 Orphan drugs
 Employee H&S
Environmental
 Drug contamination of
water
 Operational eco-efficiency
Social
 Access-to-medicines
 Affordability & fair pricing
 Drug safety & side effects
 Ethical marketing
 Local economic impacts
 Transparency & safety of
clinical trials
 Employee H&S
Environmental
 Green product design
 Product lifecycle
management
 Operational eco-efficiency
Social
 Ethical marketing
 Product safety
 Employee H&S
Governance
 Corruption & bribery
Governance
 Corruption & bribery
 Anti-Competitive Behavior
Governance
 Corruption & bribery
Environmental
 Operational Eco-efficiency
 Green Design &
Construction
 Environmental Factors in
Healing
Social
 Quality of Care
 Access for Low Income &
Uninsured Patients
 Price Transparency
 Fraud Unnecessary
Procedures
 Patient Abuse
 Patient data privacy
 Recruitment & Retention
 Cost & Utilization of Health
Care
 Health Education &
Incentives for Healthy
Living
 Employee H&S
Environmental
 Reliability & efficiency in
logistics
 Product Lifecycle
Management
Social
 Product safety
 Conflicts of Interest
 Employee H&S
Governance
 Anti-competitive Behavior
 Fraud
Environmental
 Environmental Factors in
Healing
Social
 Proper Alignment of Risks
& Benefits
 Electronic Records &
Privacy of Patient Data
 Health education &
incentives for healthy
lifestyles
 Transparent Pricing
 Transparent Billing
 Customer satisfaction,
complaints
 Cost & utilization of
healthcare
 Employee H&S
Governance
 Political Contributions
Top 5 companies





Amgen Inc.
Gilead Sciences
Biogen Idec Corp
Celgene Corp
Vertex Pharmaceuticals
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




Pfizer
Merck & Co
Abbot Laboratories
Johnson & Johnson
Eli Lilly & Co





Johnson & Johnson
Medtronic Inc.
Thermo Fisher Scientific
Abbot Laboratories
Stryker Corp.
© 2013 SASB™





HCA Holdings
Community Health Systems
Tenet Healthcare
Universal Health Srvs
Davita Inc.
CONFIDENTIAL & PROPRIETARY





McKesson Corp.
Cardinal Health Inc.
AmerisourceBergen
CVS Caremaker Corp.
Express Scripts Holding





United Health Group
WellPoint Inc.
Humana Inc.
Aetna Inc.
Cigna Corp.
From Material ESG Issues to Suggested KPIs
Pharmaceuticals
Material Issues
Suggested KPIs
Ranking in the Access to Medicines Index
Access to Medicines Initiatives to promote access to health care products in priority countries
as defined by Access to Medicines
Number of products listed by the FDA in the Adverse Event Reporting
Drug Safety and Side System (AERS) in the past five years
Effects
Number of fatalities due to side-effects
Number and value ($) of products recalled in the past five years
Lost revenue due to slowed or terminated clinical trials
Disclose information about the result of all of its clinical trials conducted
in ATM Index Countries regardless of the outcome & whether the trial
Safety of Clinical Trial
was conducted in-house or through a third-party.
Participants
Discuss any breach of international codes or lawsuits related to its
clinical trial practices in the (ATM) Index Countries during the last five
years.
Affordability and Fair Reverse payments to manufacturing companies, to delay the production
Pricing
of biosimilars or generics.
Warning letters or amount ($) of settlements regarding false claim
allegations.
Ethical Marketing
Adoption and enforcement of code of ethics governing interactions with
healthcare professionals.
Revenue from orphan drugs
Orphan Drugs
Discussion of ongoing efforts to address orphan diseases
Percentage of wastewater treated for drug compounds produced by
company
Amount of product recovered through take-back programs
Pharmaceutical Water
Product stewardship initiatives to promote reuse or adequate disposal
Contamination
at the end of the lifecycle.
Efforts to understand metabolites and potential for environmental
migration of drugs into waterways and ecosystems (SASB)
Research relating to treatments and vaccines for malaria, dengue fever,
Disease Migration
and other associated diseases
…
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© 2013 SASB™
CONFIDENTIAL & PROPRIETARY
Health Care Industry Working Groups
The Research Team produces industry briefs for each
industry in the sector, addressing material issues,
evidence of links to valuation, and KPIs currently in use.
These serve as background material for consideration in
the Industry Working Groups.
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© 2013 SASB™
CONFIDENTIAL & PROPRIETARY
SASB’s rigorous, ANSI compliant standards setting process
Launch of
IWG Forum
Prior Work
• Recruit
IWGs
• Liaise
with
Industry
Groups
Standards
Council
Process
Review
IWG Forum
Disbanded
Industry
Research
Review
Material Issues
KPI
Harvesting
Prepare
Strawmen
IWG Review
Prepare Draft for
Public Comment
30 Day
Comment
SASB
SASB
SASB
SASB
IWG Forum
SASB
Public
4-Month Preparation Phase
Prepare final draft of KPIs
for Standards Council
30 Days
SASB
Standards
Council Review
of draft standards
after comment
2-Month Intensive
Development Phase
Finalization of KPIs for all industries
in a sector and release preparation
30 Days
SASB
Stds. Council
3-Month Refinement Phase (Continued)
21
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© 2012 SASB™
CONFIDENTIAL & PROPRIETARY
Response to
Comments
30 Days
SASB
3-Month Refinement
KPIs
Release of
Sector KPIs
for Public
use and
Industry pilot
Industry Working Group Participants
Health Care
Selected Companies
Johnson and Johnson
Baxter
Aetna
Ingersoll Rand
Becton, Dickinson and
Company
Biogen Idec
Davita
HCA Holdings, Inc
Novo Nordisk
CBRE Group
Pfizer
Encision, Inc
Atlas Copco
Mettler-Toledo
Merck
Financials
Selected Investors
Alliance Bernstein
Trillium Asset Management
Domini Social Investments
Pax World Investments
Harrington Investments
UAW Retiree Medical
Benefits Trust
Calvert Investments
Boston Common Asset
Management
Henderson Global Investors
Core Capital Management
UBS Securities
Breckinridge Capital
Advisors
Stifel Nicolaus
Health Care participants represent companies
with more than $800B market cap and investors
with more than $952B in AUM
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Selected Companies
ANZ Banking Group
Aegon Group
TD Bank Group
The Hartford Group
Royal Bank of Canada
Comerica
Wells Fargo Bank
HSBC Private Bank
DNB
ING
Visa
Morgan Stanley
Bank of America
Citigroup
MetLife Bank
Selected Investors
Macquarie Group
Independent Capital
Management AG
Standard Life Investments
Aviva Investors
Breckinridge Capital
Advisors
Oddo Securities
Calvert Investments
DB Advisors
Hermes Fund Manager
Pax World Investments
Domini Social Investments
Trillium Asset Management
First Affirmative Financial
Network
Financials participants represent companies with
more than $1.3T market cap and investors with
more than $5T in AUM
CONFIDENTIAL & PROPRIETARY
Building Consensus on KPIs
Suggested KPIs
Relevant.
Useful.
Cost-effective.
Comparable.
Auditable.
Discuss co-pay structures, deductibles, and premiums encouraging preventative care and wellness
All members
90%
90%
90%
70%
70%
Corporation
100%
100%
100%
33%
67%
Market Participant
100%
100%
100%
100%
100%
Others
67%
67%
67%
67%
33%
Percentage of enrollees engaged in wellness programs
All members
90%
70%
60%
60%
70%
Corporation
100%
100%
67%
33%
67%
Market Participant
100%
75%
75%
75%
100%
Others
67%
33%
33%
67%
33%
Corporations and investors agree on the usefulness and
cost-effectiveness of the Health Care KPIs
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© 2013 SASB™
CONFIDENTIAL & PROPRIETARY
SASB’s rigorous, ANSI compliant standards setting process
Launch of
IWG Forum
Prior Work
• Recruit
IWGs
• Liaise
with
Industry
Groups
Standards
Council
Process
Review
IWG Forum
Disbanded
Industry
Research
Review
Material Issues
KPI
Harvesting
Prepare
Strawmen
IWG Review
Prepare Draft for
Public Comment
30 Day
Comment
SASB
SASB
SASB
SASB
IWG Forum
SASB
Public
4-Month Preparation Phase
Prepare final draft of KPIs
for Standards Council
30 Days
SASB
Standards
Council Review
of draft standards
after comment
2-Month Intensive
Development Phase
Finalization of KPIs for all industries
in a sector and release preparation
30 Days
SASB
Stds. Council
3-Month Refinement Phase (Continued)
24
7/17/2015
© 2012 SASB™
CONFIDENTIAL & PROPRIETARY
Response to
Comments
30 Days
SASB
3-Month Refinement
KPIs
Release of
Sector KPIs
for Public
use and
Industry pilot
Standards Council
James Coburn
CERES
Christine Ervin
CE Co. - Former USGBC
Patricia Farrar Rivas
Veris Wealth Partners
Jeffrey Hales*
INSEAD
Shana Harbour - Observer
US EPA
Tom Kiely
McKinsey
Gayle Koch
Axlor
Stephen Linaweaver
BluSkye
Andrew Park – Observer
Bloomberg
Jameela Pedicini
CalPERS
Greg Rogers
Guida Slavich Flores
Elizabeth Seeger
KKR
George Serafeim
Harvard Business School
Katherine Schipper
Duke University
Jeremy Shapiro
Morgan Stanley
Nigel Topping
Carbon Disclosure Project
Jean Rogers (ex-officio)
Sustainability Accounting Standards Board
25 *Chairman
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© 2013 SASB™
CONFIDENTIAL & PROPRIETARY
Structure
SASB is a nonprofit private sector organization complementing the work of FASB and supporting the work of the SEC. The structure of
the organization reflects the major program area associated with standards development. Future program areas will support
development of a comprehensive non-financial accounting system, including data mining and quantitative methods for use of ESG
data in investment decisions, and development of robust auditing and assurance methods for non-financial data.
Quantitative
Modeling*
Auditing and
Assurance*
* Future program areas to be developed with partner organizations
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CONFIDENTIAL & PROPRIETARY
SASB Impact
Harnessing market forces to address global sustainability challenges

Governments directing funding and policies toward the most pressing issues
in particular industries

Investors directing capital toward sustainable industries

Leveraging corporate resources to proactively reduce impact and throughput
Full cost accounting, ultimately leading to sustainable value creation

Acknowledgement of underlying environmental & human capital essential to
sustaining value creation
Delineating a roadmap to focus and leverage action on key issues

Clarity around key issues and priorities

Converging and leveraging philanthropic and corporate efforts
Sustainable capitalism model for mature and emerging economies
All investing becomes impact investing
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CONFIDENTIAL & PROPRIETARY
SASB and Climate Change

Corporate reporting on key indicators associated with climate change is inconsistent
and inadequate

SASB addresses climate change by:

Identifying industries where climate change is material so that portfolios can be
assessed in terms of risks and assets allocated accordingly.

Identifying industries where there are material innovation opportunities associated
with climate change mitigation

Surfacing industry practices that may protect financial capital in the near term but
contribute to a systemic erosion of value by externalizing impacts
 Surfacing performance data that enables investors to benchmark companies’
performance in regards to climate change
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CONFIDENTIAL & PROPRIETARY
SICS and GHG
Using CDP’s Scope 1, 2 and 3 definitions, Bloomberg data, and SASB’s SICS,
SASB has taken a first look at how GHG emissions break out across SASB’s
SICS sectors.
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© 2012 SASB™
CONFIDENTIAL & PROPRIETARY
Climate Change Disclosure After SEC Guidance
The SEC has issued guidance on climate change disclosure, but the
guidance vague and the resulting reporting is insufficient
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© 2013 SASB™
PROPRIETARY
CONFIDENTIAL &
The Need for Industry-Specific Standards for Climate
Change Disclosure
 Different industries need different metrics in order to make the disclosure useful:
 Airlines should disclose fuel practices (conservation and alternative fuels)
 Utilities should discuss moving to a renewable energy portfolio
 Real estate should discuss the demand for and availability of green buildings and
the vulnerability of assets in coastal locations
 Insurance should disclose the vulnerability of insured assets and the impact of
increased catastrophic storm events
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© 2013 SASB™
PROPRIETARY
CONFIDENTIAL &