Companies in the healthcare and financial sectors are being called upon to participate in a new corporate pilot program designed to bring uniformity to how companies disclose material environmental, social, and corporate governance risks in their annual filings to the Securities and Exchange Commission.

The Sustainability Accounting Standards Board, a non-profit standard-setting body established in 2011, will select ten companies in advance of the pilot program set to launch in the first quarter of 2014. SASB is accredited by the American National Standards Institute to set standards for disclosure of sustainability issues by U.S. publicly listed companies.

In collaboration with Bloomberg and other partners, SASB will run pilot programs for a total of 10 sectors over the next three years. Joining the pilot program requires the participation of the chief financial officer and the chief sustainability officer (or equivalent) in order to facilitate incorporation of material sustainability factors into the Form 10-K. 

As Compliance Week previously reported, the inspiration for SASB and its standards sprung from investor activists clamoring in recent years for greater disclosure of “ESG” performance. Companies responded by publishing annual reports of their corporate social responsibility efforts, but a lack of standard disclosure metrics left investors unhappy since they couldn't compare one company's CSR efforts against another's.

“SASB standards fill an unmet need to provide investors with standardized, comparable information on material sustainability issues but the standards can't fulfill this goal unless they are used,” said Curtis Ravenel, global head of sustainability initiatives at Bloomberg, the lead strategic partner on this initiative. “The pilot program will provide a roadmap to prepare companies to use SASB standards in mandatory SEC filings.”

SASB will manage the pilot program, provide standards expertise, educate delivery partners, and create a structured review process for program success. Bloomberg will provide industry benchmarking on the state of disclosure, data sources and data integrity expertise.

SASB and Bloomberg will work with partners experienced in securities law, Form 10-K preparation, business process reengineering, data management and verification, and investor relations to deliver the program. The intent is for companies to come away with an appreciation for the legal framework governing Form 10-K disclosures; an understanding of their current quality of disclosure and readiness to report; and the ability to recognize and disclose material sustainability factors using SASB industry standards. 

For more information on how to participate to the corporate pilot program, contact info@sasb.org