SASB Issues Sustainability Accounting Standards for Infrastructure Sector

The Sustainability Accounting Standards Board has issued provisional sustainability accounting standards for the infrastructure sector, including electric utilities, engineering and construction services, gas utilities, home builders, real estate owners, developers and investment trusts, real estate services, waste management and waste utilities.

The infrastructure sector marks the final set of standards issued by SASB, rounding out the organization’s full set of provisional standards for 79 industries in 10 sectors.

Infrastructure companies can voluntarily use SASB standards to disclose material, decision-useful information to investors within mandatory filings including the Form 10-K and 20-F. The standards average five topics per industry and 14 metrics per industry, 73 percent of which are quantitative.

“Many companies within the Infrastructure sector are leaders in driving sustainability performance,” said SASB CEO Dr. Jean Rogers in a statement. “Efficient use of resources and management of climate risk can affect the financial condition and operating performance of companies in these industries. In addition, engineering and real estate industries play roles in both constructing sustainable structures and ensuring resource use is optimized by occupants and users of the built environment. Companies can use SASB standards to identify, manage, and disclose these risks and opportunities to investors in a decision-useful format.” 

The working groups for developing the infrastructure standards included 437 participants affiliated with publicly traded companies with $524 billion market capitalization and investment firms with $2.3 trillion in assets under management.  

Unlike the Financial Accounting Standards Board, the Sustainability Accounting Standards Board has no official standard-setting role, but functions as an independent 501(c)3 organization that issues industry-specific standards for use in disclosing material sustainability information in filings to the Securities and Exchange Commission. However, it includes a number of influential board members, including former New York City Mayor Michael R. Bloomberg, founder of Bloomberg LP, and former SEC chairman Mary Schapiro, who respectively serve as chair and vice chair of SASB’s board of directors. Other board members include former FASB chairman Robert Herz and another former SEC chair, Elisse Walter.

In the next phase of the standards process, SASB is looking for further consultation to get feedback on the standards’ decision-usefulness and cost-effectiveness. SASB’s proposed process for codifying and maintaining the standards will open for public comment on April 7.