SUSTAINABILITY  - Emerging Theme

Companies face an ever-expanding laundry list of risks and opportunities, many
of which are not captured by traditional financial statements. They see it in their declining ratio of net assets to enterprise value, in their frequently short-sighted earnings guidance, and in a changing regulatory landscape. Large-scale issues such as population growth, resource constraints, urbanization, technological innovation, and climate change can and do have profound effects on business outcomes. As a result, managers are incorporating non-financial performance measures into their decision-making processes and investors are looking beyond traditional financial statements for a more complete picture of how companies create value over the long-term. The impact of climate change and environment induced opportunities and risks form a large part of sustainability. 

Increasingly, a wide range of market participants—including companies, investors, accountants, and lawyers—recognizes the need for a shared understanding of how these non-financial value drivers impact corporate performance and for a common language to communicate those impacts.

This is where standards assist through  material, comparable, neutral and understandable reporting for stakeholders. Similar to what FASB does for financial reporting in US.

In 2015 Harvard Management Company, which manages an endowment valued at $36.4 billion, began to encourage the energy sector companies with which it engages to incorporate SASB standards into their public filings.