As noted in the chapter, the demand for sustainability reporting has grown, and this growth has created a demand for sustainability assurance, the ability to add verification and credibility to the assurance reports. One organization focused on the verification of sustainability reports is the Sustainability Accounting Standards Board (SASB, www.sasb.org/), which has recently developed a Conceptual Framework that provides a list of criteria for management accountants to use in evaluating the measures used in sustainability reporting. These criteria are discussed in a recent article in the CPA Journal: Jill M. D’Aguila, “The Current State of Sustainability Reporting,” The CPA Journal, July 2018 (www.cpajournal.com/2018/07/30/the-current-state-of-sustainability-reporting/).

Required:

1. Which three of the criteria in the following list are not SASB criteria?

a. Fair representation: Metrics should accurately describe performance related to the disclosure topic.

b. Useful: Metrics should help companies manage operations and help investors perform financial analysis.

c. Applicable: Metrics should be based on definitions applicable to most companies within an industry.

d. Valid: Metrics should correctly be related to the underlying sustainability issue.

e. Comparable: Metrics should provide both quantitative and qualitative information. The quantitative data will facilitate benchmarking within an industry, and the qualitative information will facilitate comparisons.

f. Complete: Metrics should provide sufficient information to interpret performance relative to sustainability.

g. Comprehensive: Metrics should comprehensively reflect the theoretical foundation of the desired measure.

h. Verifiable: Metrics should support effective internal controls to verify data and provide assurance.

i. Aligned: Metrics should be based on those already used by companies.

j. Neutral: Metrics should be unbiased and provide objective disclosure of performance.

k. Distributive: Metrics should provide a range of data within an industry or across industries to allow users to differentiate performance.

l. Scientific: Metrics should be based on appropriate scientific study.

2. The CPA Journal article cited above notes there are challenges to the development of widely adopted standards for sustainability reporting. What do you think are the key challenges, and why? Which of the providers of sustainability standards is most appropriate for U.S. investors, and why?