The Sustainability Accounting Standards Board has released a set of provisional sustainability accounting standards for 10 industries within the services sector.
They include education, casinos and gaming, cruise lines, leisure facilities, professional services, advertising and marketing, hotels and lodging, media production and distribution, restaurants, and cable and satellite.
The provisional standards aim to help corporations comply with the existing Regulation S-K to disclose material information in the Form 10-K. SASB has previously released standards for other sectors and industries, including health care, financial, technology and communications, non-renewable resources, and transportation
Some examples of topics in the provisional standards that companies might disclose include energy management, fair labor practices, data privacy, supply chain management and food sourcing.
“The diverse industries in the services sector share a reliance on human capital as a main input, which raises issues ranging from wages and labor practices to diversity,” says SASB CEO Dr. Jean Rogers in a statement. “These provisional standards will provide investors with the comparable information needed to benchmark companies and make sound investment decisions.”
The working groups that helped SASB develop the services industry standards included 271 registrants representing publicly traded companies with $909 billion market capital and investment firms with $9.7 trillion in assets under management.
The standards have received support from several large service corporations, including the hotel giants Starwood Hotels & Resorts Worldwide and Caesars Entertainment Corporation.
“As investors increasingly evaluate non-traditional categories and measures to make decisions, companies are seeking reporting standards for disclosing material sustainability information,” said Gary Loveman, chairman, president and CEO of Caesars Entertainment Corporation. “SASB has gained well-deserved recognition as a leading sustainability-standards organization that can offer forward-thinking executives tools to help them achieve sustainability leadership.”
“At Starwood, tracking, measuring, and benchmarking our progress against sustainability goals allows us to make real progress,” said Andrea Pinabell, vice president of sustainability and global citizenship at Starwood Hotels & Resorts Worldwide, Inc. “Having a standard like SASB supports our triple bottom line strategy and helps us to better integrate and align metrics with other parts of the organization.”
SASB has found that many of the largest companies fall short when it comes to disclosing corporate sustainability efforts. When analyzing the quality of services disclosure topics in the latest Form 10-Ks and 20-Fs from leading companies in the sector, SASB found that 20 percent of disclosures are boilerplate, 36 percent are industry-specific and 10 percent are metrics, while the remaining 34 percent represent a lack of disclosure. The goal of SASB’s standards is to improve the quality of disclosure by providing investors with complete and comparable data sets.
SASB said its standards would remain provisional for at least one year after the issuance date. To provide feedback, please visit SASB’s public comment portal.
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