August 2, 2023

The evolution of the SASB Standards—A conversation with Jeff Hales


While much work has been done on the road toward a global baseline of investor-focused sustainability disclosures, the journey continues. Consolidation of various frameworks and guidance under the ISSB was a critical step toward helping companies communicate efficiently and effectively about sustainability-related risks and opportunities.

In June 2023, the ISSB issued its inaugural global IFRS Sustainability Disclosure Standards, IFRS S1 and IFRS S2, which build upon the SASB Standards, Integrated Reporting Framework and CDSB Framework and incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

The SASB Standards are integral to the ISSB Standards, and their continued use will support companies on the path to ISSB implementation.

  • IFRS S1 provides a set of disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term. It requires companies to consider the SASB Standards to identify sustainability-related risks and opportunities and disclose related information beyond climate.
  • IFRS S2 sets out specific climate-related disclosures and is designed to be used with IFRS S1. It includes accompanying guidance derived from the climate-related topics and metrics in the SASB Standards, which have been enhanced to improve international applicability.

To explore the ISSB’s commitment to maintaining, enhancing and evolving the SASB Standards, we asked Jeff Hales, ISSB member and former Chair of the SASB Standards Board, to share his perspective on the evolution of the SASB Standards, how they support the application of ISSB Standards and what’s on the horizon.

ISSB Standards are the natural evolution of the SASB Standards.

As more and more companies have been using the SASB Standards, there’s been an increase in understanding of how to apply them, and we have seen best practices emerge. For example:

  • Rather than simply referencing the SASB Standards, companies are reporting in line with them, and on a more complete basis, across all the identified disclosure topics and supporting metrics.
  • Reporters are also increasingly obtaining assurance for their sustainability-related disclosures.
  • Companies are moving beyond broad stakeholder disclosure channels like stand-alone sustainability reports to more investor-focused channels like integrated and annual reports, enabling investors to access the information they need more easily.

The ISSB is taking the next step in the natural evolution of the SASB Standards, to better meet both investor and company needs. While the SASB Standards help companies identify the issues specific to their industry, the ISSB Standards recognise that sustainability-related risks and opportunities aren’t just industry-specific, but entity-specific, and that there are issues that cut across industries. This helps elevate the conversation on sustainability-related topics.

For example, IFRS S1 helps companies go a step further, to provide investors with information that is specific to their own circumstances, as well as their own industry.

IFRS S2 also brings the TCFD Recommendations and climate-related topics and metrics from the SASB Standards into one reporting framework for climate-related disclosures.

Companies can begin to voluntarily apply IFRS S1 and IFRS S2 for reporting periods from 2024, and we have incorporated a number of accommodations to allow them to grow into their capability to fully meet the requirements. For example, companies can use their first year to get familiar with concepts and requirements within the ISSB Standards—using climate first, before reporting on other sustainability-related risks and opportunities.

When companies want to comply with IFRS S1 and IFRS S2 disclosure requirements, the SASB Standards, being industry-specific, will help them identify relevant topics and metrics cost-effectively and provide comparable, decision-useful information to investors.

SASB Standards enhancements will support quality ISSB disclosures.

Given the role of the SASB Standards, it’s particularly important that the ISSB keep the SASB Standards up to date.

I am one of five ISSB members comprising the SASB Standards Board Advisory Group, which is charged with making recommendations to the ISSB on how to improve the SASB Standards. We do this by working with the staff to engage with investors, companies and other stakeholders to understand where there are opportunities or challenges.

For example, historically, there have been jurisdiction-specific references in some of the SASB Standards that could create challenges for companies applying the SASB Standards on a global basis. Many of these references were addressed when the ISSB was developing the industry-based guidance for IFRS S2, and the ISSB recently voted to update the climate-related disclosure topics in the SASB Standards to keep them aligned with IFRS S2.

However, climate issues cover only about a third of the content in the SASB Standards, so there is still important work to do to update the non-climate related content in the SASB Standards to make sure they remain as useful and applicable as they can be all around the world.

To this end, we initiated a consultation in May 2023 asking for feedback on five different approaches we might use when there’s a jurisdiction-specific reference in a given metric. This methodology builds off of the approach used by the ISSB when developing the industry-based guidance for IFRS S2. By focusing on the methodology, rather than asking for detailed feedback on specific proposed changes, we are simplifying the request of companies and investors, and reducing the need to hear from representatives from every industry that might be affected by the methodology. This will also help to make sure that the updates are done in a principled, consistent way.

In many ways, this is just the end of a first step in the ISSB’s commitment to maintain and enhance the SASB Standards. In this public consultation, we are also asking for other suggestions on how to make improve the SASB Standards, including how to make it easier to use the SASB Standards regardless of where a company is located, and we will be conducting further consultations as the ISSB Standards continue to be developed.

Read more about ISSB updates to the SASB Standards on, and be sure you are subscribed for news alerts to stay updated on the ISSB’s work and opportunities to get involved.