Sustainability Disclosures Are Coming!

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Rao, Sunita
Scofield, Barbara
Washburn University. School of Business
Kaw Valley Bank
Issue Date
June 2020
Alternative Title
Financial statement users want to know about public companies' impact on the environment, their contribution to the global community, and the responsiveness of their governance. Until recently, financial statement users found little in the required SEC filings and annual report. Instead each company may have produced an additional sustainability report, each one unique to that company that, with different measures, formats, and coverage. In addition, companies are asked for direct disclosures seek to provide investors with third party ratings on environmental, social, and governance (ESG) goals. While these existing voluntary reports and rankings are useful, the evolution of financial reporting toward standardization is now being replicated in the increasing standardization of ESG repo,ting resulting in the possibility of comparable and complete information on nonfinancial measures of sustainability. The disclosure framework of the Sustainability Accounting Standards Board (SASB) has been adopted by 100 US and 75 international companies to provide industry-specific, financially-material disclosures on sustainability issues (see Table 1). Eleven Texas-headquartered companies are currently SASB reporters, and we'll explore the impact of SASB on financial reporting by looking at three companies from diverse industries: Waste Management, Halliburton, and Comerica.