What is SASB and Why It’s So Relevant Today

The Sustainability Accounting Standards Board (SASB) was established in 2011 as a nonprofit to address a growing challenge: businesses and investors lacked a shared framework to understand the financial implications of sustainability.

By creating industry-specific standards, SASB ESG provided a common language that links environmental and social issues to financial performance. Over time, it became one of the most influential systems for corporate sustainability disclosure, widely adopted by organizations seeking credibility with capital markets.

In this article, we’ll explore what SASB ESG is in detail and everything you need to know about SASB reporting to stay compliant.

SASB Meaning and How Does It Differ?

If you’re wondering what SASB stands for…it’s the Sustainability Accounting Standards Board (SASB), a framework that connects sustainability topics directly to financial performance. 

And unlike other ESG reporting standards, SASB ESG caters to specific industries. The board takes into account that different industries have different sustainability risk factors to build out industry specific disclosures for ESG compliance requirements. 

SASB ESG framework is built to support companies in sharing their ESG impacts through the language of investors, debt holders, and internal financial stakeholders. The Sustainability Accounting Standards Board (SASB) uses the Sustainable Industry Classification System (SICS) to identify different sustainability requirements across industries and sectors.

In SICS, a company’s sustainability risks and opportunities are more important for its classification than other traditional factors, such as economic cycles and revenue streams. 

SASB ESG Framework: A Detailed Overview

SASB ESG framework is not a checklist but a structured methodology, rooted in evidence and industry analysis, that guides both companies and investors toward decision-useful data.

1. Industry Standards Built on Evidence

SASB reporting standards cover 77 industries. Each standard was developed through deep research into which sustainability factors historically and empirically influence financial performance in that sector. This ensures disclosures are not arbitrary—they are grounded in demonstrable links between ESG factors and financial performance.

2. SASB Materiality Map 

At the heart of the SASB ESG framework is the SASB materiality map. Unlike traditional materiality assessments that can be subjective, the SASB materiality map codifies material topics by industry. 

Companies and investors can see, at a glance, which sustainability issues matter most to enterprise value in their sector. 

3. SASB Sustainability Metrics

The framework emphasizes SASB sustainability metrics, which are standardized, comparable, and designed for financial relevance. Metrics include both quantitative disclosures (e.g., greenhouse gas emissions per unit of output, percentage of water recycled, employee turnover rates) and qualitative disclosures (e.g., data security policies, supply chain risk management). 

The power lies in comparability: investors can line up companies in the same sector and directly assess performance on the same metrics, much like financial ratios.

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Source:   https://materiality.sasb.org/

What is SASB Sustainability Reporting and How is it Done?

SASB ESG reporting is the process of disclosing how sustainability issues impact a company’s financial performance, using the SASB reporting standards as the guide. Here’s how it's done:

1. Defining Scope and Materiality Mapping

To define scope and boundaries for SASB reporting, companies start by identifying all legal entities, business units, and geographies under their control. Next, they map financial relevance by reviewing the SASB materiality topics for their industry based on the Sustainable Industry Classification System (SICS) 

Operations, supply chain activities, or product lines that materially impact revenues, costs, or risks are included.

Selecting SASB Sustainability Metrics

After identifying material topics through the SASB materiality map, companies must choose the right SASB sustainability metrics to disclose. These metrics are the heart of the SASB ESG framework because they translate qualitative ESG risks into measurable, investor-grade data.

For instance, common metrics for IT service providers include the number of data breaches involving confidential customer information and employee diversity metrics in technical roles.

This also involves blending quantitative and qualitative metrics, ensuring investors see not only outcomes but also how risks are managed.

Data Collection and Validation

For SASB reporting standards, data collection begins by pulling information from finance, HR, operations, IT, and supply chain systems aligned with industry-specific metrics. Integration with ERP, HRMS, or EHS tools ensures consistency and traceability. 

Validation involves internal controls, cross-checking against financial data, maintaining audit trails, and, increasingly, external assurance. This process ensures SASB sustainability metrics are accurate, comparable, and credible—giving investors reliable insight into financially material ESG risks while reducing compliance gaps and reputational risk.

Drafting and Disclosing

In SASB reporting, disclosures are presented in formats investors already use—annual reports, 10-K filings, or standalone ESG reports. Companies align their material topics with SASB sustainability metrics, then structure disclosures as data tables, ratios, or narrative context. 

Many include a SASB index linking metrics to the standards, ensuring clarity. Increasingly, firms embed SASB metrics alongside financials to highlight material ESG factors. This approach ensures disclosures are comparable, transparent, and decision-useful for capital markets.

What are the benefits of SASB ESG Reporting?

SASB standards deliver important benefits for corporations, investors, and ESG adoption overall:

1. SASB allows businesses to build ESG sustainability strategies around the most material issues for their industry. This ensures resources are focused on the areas with the highest financial and operational impact, making ESG efforts more strategic and value-driven.

2. SASB reporting allows organisations to clearly compare themselves to peers within their industry facilitating accurate benchmarking. Standardized disclosures reveal competitive positioning, helping businesses identify strengths, weaknesses, and opportunities to outperform sector rivals.

3. Investors look at SASB Standards as a core tool to get comparable, consistent, and reliable data on financially material sustainability factors. This credibility strengthens investor confidence and often improves access to sustainable capital and long-term partnerships.

4. SASB offers flexibility in reporting, allowing you to club their accounting metrics along with disclosures from Global Reporting Initiative (GRI), Task Force on Climate-related Financial Disclosures (TCFD), or Carbon Disclosure Project (CDP). This interoperability reduces reporting fatigue, enabling companies to meet multiple stakeholder demands without duplicating effort.

Leveraging AI-Powered ESG Software For Seamless SASB Compliance

The rigor of SASB reporting—defining scope, mapping materiality, selecting metrics, validating data, and preparing disclosures—can overwhelm even mature organizations. Manual processes often lead to fragmented data, reporting fatigue, and compliance risks. 

This is where AI-powered ESG software like Breathe ESG come handy.

Breathe ESG provides an end-to-end sustainability operating system that automates every stage of SASB reporting. Its unified data hub integrates inputs from ERP, HRMS, operations, and supply chains, ensuring consistency across all SASB sustainability metrics. Additionally, its smart platform flags anomalies, maintains audit trails, and guarantees investor-grade accuracy.

Breathe ESG also offers sector-specific insights, aligning directly with the SASB materiality map to help companies focus only on what matters financially for their industry. With customizable dashboards, predictive analytics, and assurance-ready disclosures, organizations can benchmark against peers and meet investor expectations seamlessly.

By combining automation with advisory support, Breathe ESG enables companies to not just comply with SASB reporting standards but to unlock strategic value from their sustainability data.

Book a free demo to explore AI-powered SASB reporting at your fingertips.

FAQs

What is the difference between GRI and SASB?

Global Reporting Initiative (GRI) focuses on impact materiality—how companies affect society and the environment. Sustainability Accounting Standards Board (SASB) emphasizes financial materiality—how sustainability factors affect enterprise value. GRI serves broad stakeholders; SASB serves investors.

What is the difference between ISSB and SASB?

The International Sustainability Standards Board (ISSB) develops global baseline sustainability disclosure standards. On the other hand, the Sustainability Accounting Standards Board (SASB) provides industry-specific metrics on financial materiality. SASB standards were consolidated under ISSB in 2022 as part of IFRS sustainability disclosure standards.

What is the difference between SASB and IR?

The Sustainability Accounting Standards Board (SASB) offers industry-specific sustainability metrics for financial materiality. On the other hand, Integrated Reporting (IR) provides a principles-based framework combining financial and non-financial information to show how an organization creates long-term value.