The current patchwork of sustainability standards can confuse companies and make it difficult for investors to glean useful information and make comparisons. However, coastal flooding, high heat events, and other climate disruptions are already costing companies and society dearly. Today’s investors want rigorous, standardized sustainability disclosure from corporations to support informed investment decisions and risk analysis.
In support of that goal, Domini has joined the SASB Alliance – a new membership program of The SASB Foundation (SASB). SASB is dedicated to developing industry-specific sustainability indicators for companies to include in their SEC-mandated financial reports. SASB seeks to define for 79 industries what environmental, social and governance (ESG) issues are likely to be financially material to investors. A 2015 Harvard Business School study using SASB’s key performance indicators found that firms with good performance on these material sustainability issues outperformed companies with poor records.
The inclusion of sustainability information in SEC filings would not only ensure a greater degree of comparability and reliability for this information, it would dramatically improve corporate and investor management of these critical social and environmental risks. The integration of sustainability information into SEC filings is the key to mainstream consideration of sustainability risks and opportunities.
Domini Impact Investments has worked to encourage corporate sustainability reporting for many years, through our support for the Global Reporting Initiative, direct engagement with companies and stock exchanges, and advocacy at the Securities and Exchange Commission. We strongly believe that meaningful, comparable sustainability information will not only help investors mitigate a range of financial risks, it will also help align our capital markets with the needs of society and the environment.
The SASB Alliance was created to provide a forum for like-minded organizations and individuals to develop and explore best practices to integrate material sustainability information into existing processes. The SASB Alliance includes corporations and investors, including Bloomberg, CalPERS, CalSTRS and NRG Energy. By joining the SASB Alliance, organizations signal their support for standardized sustainability disclosures that meet the needs of investors while reducing the burden on corporations.
Domini has a significant history with SASB, stretching back far before our membership in the Alliance. The original concept of SASB emerged from a paper co-authored by Steve Lydenberg, a Domini principal, along with David Wood of the Initiative for Responsible Investment and Jean Rogers, who then went on to found SASB. Steve Lydenberg served on the SASB’s initial board and Domini has participated in developing SASB’s disclosure topics and accounting metrics. Our CEO, Carole Laible, is a founding member of the SASB Investor Advisory Group (IAG), which includes leading asset owners and managers.
Read more about the Alliance at https://www.sasb.org/alliance/.