Sustainability Reporting Standards For The Automotive Industry

The Sustainability Accounting Standards Board (SASB), a non-profit organization incorporated in 2011, was formed to provide investors and the general public with decision-useful information to assess sustainability issues of U.S. publicly traded companies. SASB defines sustainability as those "environmental, social and governance (ESG) factors that have the potential to affect long-term value creation and/or are in the public's interest."

SASB uses the U.S. Supreme Court definition of material information: 'Information presenting a substantial likelihood that the disclosure of the omitted fact would have been viewed by the "reasonable investor" as having significantly altered the "total mix" of information made available.' This definition applies to both financial and non-financial material risks and opportunities. SASB's intent, therefore, is to provide a mechanism to determine how well a company manages all forms of capital in a resource constrained world through comparison and disclosure of material non-financial data.

Through collaboration with industry workgroups, SASB is focusing on mapping industrial sector material issues and developing key performance metrics for ESG issues for 89 industries in 10 sectors through first quarter 2015. Performance metrics used by all corporations in the same industry sector allow peer-to-peer comparison and promote further transparency and accountability.

Industry standards developed by SASB are rolling out in stages. A draft set of key performance indicators (KPIs) for transportation is expected to be issued for public comment on April 17, 2014. The standards are...