SASB recognizes that there is broad support in global capital markets for all companies—regardless of their industry—to disclose their Scope 1, Scope 2, and (where feasible) Scope 3 greenhouse gas (GHG) emissions. SASB's approach to climate-related disclosure is different but not in conflict with such cross-industry reporting.
SASB’s standard-setting process is designed to elicit the metrics that are most useful to companies and investors in understanding and managing the direct risks and opportunities presented by climate change and other sustainability issues. This process has identified a GHG emissions metric (i.e., Scope 1) in the 22 industries that involve significant direct emissions—because these are the industries likely to face material financial impacts specifically related to their emissions. These impacts may manifest as regulatory risks and shifts in consumer demand, which in turn affect costs and revenues.
For indirect emissions, SASB Standards capture the operational and/or strategic factors that give rise to such emissions. For the 35 industries that indirectly contribute to greenhouse gas emissions through significant use of purchased electricity (i.e., Scope 2), SASB Standards recommend metrics related to understanding the amount, type (i.e., conventional or renewable), and source (i.e., if it is self-generated or purchased) of energy. Again, SASB’s research and consultation have demonstrated that these measures highlight the direct risk-management levers available to a company—and measure how the company is using them—and therefore provide actionable data to management and decision-useful information to investors.
For industries that indirectly contribute to greenhouse gas emissions upstream (e.g., from purchased materials processing and transportation), downstream (e.g., from distribution and use of products), or in other ways (e.g., from employee commuting and business travel)—in other words, Scope 3 emissions—SASB Standards recommend metrics directly related to performance in those areas, where they are financially material.
For more information on SASB's approach to GHG emissions and related topics, see the SASB Implementation Supplement: Greenhouse Gas Emissions and SASB Standards and the SASB Climate Risk Technical Bulletin.