ABA Advises Groups of Challenges in Setting Sustainability Disclosure Standards

Amid calls by investors and others to increase environmental, social and governance-related disclosures, the American Bankers Association yesterday advised two organizations of the challenges in setting sustainability-related disclosure standards as both organizations sought comment on their respective sustainability accounting and reporting frameworks.

In a letter to the Sustainability Accounting Standards Board, ABA pointed out the difficulty of measuring climate risk-related metrics and recommended conversations with the Securities and Exchange Commission to settle the differences between the concept of materiality as currently stated in annual reports and what sustainability investors may understand. SASB’s voluntary disclosures have been endorsed by several major investment firms.

In a separate letter to the IFRS Foundation, which operates the International Accounting Standards Board, ABA encouraged the foundation to explore whether or not to form a “sustainability standards board,” adding that coordination with other organizations like SASB would be critical if such a board is formed. ABA also warned that a sustainability standards board could unintentionally reduce donations to support its IASB operations.