By: Melisa Galasso
Blog Series (Part 3 of 3)
This is the final installment of this series, and second-half of the interview from October 8, 2013, that I had with Dr. Jean Rogers, the Founder and Executive Director of SASB. Please note that this transcript has been edited for brevity and clarity.
Q: “GRI recently released G4 which is a new set of guidelines. How do these guidelines compare to the SASB standards?”
Jean: “GRI has been around for a long time. It is a global organization but they don’t write standards. Instead they write guidelines designed for multinational use. They are very broad and not industry specific. There were only 115 participants in working groups for GRI, and there was not as much US representation. SASB is focused on US investors and reporting on the SEC Form 10-K, which is specific to US-listed companies. SASB has a more rigorous process conducted through standard setting with over 850 participants in working groups to date, and we are on track to have over 2,000 participants. In addition, our working groups are made up of one-third investors, one-third other (accountants, academics, lawyers etc.), and one-third of companies. SASB does look at the GRI indicators as well as other information, but focuses on materiality. Attributes are prioritized. SASB looks for the best metric, and then cherry picks to identify the ‘best of the best.’ The goal for every industry is to identify eight–10 key factors and metrics, which are highly material.”
Q: “Companies have been complaining about disclosure overload for some time now. Are companies willing participants or do they pushback?”
Jean: “Many companies are already reporting on sustainability outside their 10-K. While we do hear about reporting fatigue, we hear more about companies being disillusioned from not being able to determine what material is. Investors can’t really ask questions about sustainability because current reporting isn’t in a comparable format and not necessarily included in the 10-K. Our working groups to date have been comprised of one-third investors managing more than 12 trillion dollars of assets. The corporations in our working groups to date have represented more than five-trillion dollars in market cap. Corporations want an effective way to communicate sustainability, and have been flocking to us. We’ve had a very positive response. We’ve even developed a corporate pilot program to help companies adopt the standards. We will work with these companies to identify SASB data, determine where it lives, and work with them on how to recognize and disclose these factors.”
Q: “Is there anything you recommend to accountants interested in the topic of sustainability reporting?”
Jean: “I recommend that CPAs read our conceptual framework. It was recently finalized after receiving over 100 comments on the draft. Similar to the conceptual framework used in accounting, it guides the standards development process. It details the definition of materiality, and outlines how we do standard setting.”
Melisa is an Audit Manager in the Professional Practices Department at Cherry Bekaert, LLP, in Charlotte. She currently serves on NCACPA’s Accounting & Attestation Committee and is Chair-Elect of the Charlotte Chapter. Melisa can be reached at [email protected].