Final answer:
SASB provides a framework for reporting ESG information and could become the de facto ESG reporting standard, depending on industry adoption, regulatory acceptance, and how it competes or integrates with other frameworks. The IFRS Foundation's initiative to create a global sustainability reporting framework could also influence SASB's position in the future. The trajectory of ESG reporting standards remains an evolving landscape.
Step-by-step explanation:
The Sustainability Accounting Standards Board (SASB) provides a framework for businesses to report environmental, social, and governance-related (ESG) information in a standardized way. The question of whether SASB can become the de facto ESG reporting standard is complex, as it involves various factors such as regulatory acceptance, industry adoption, and the integration with other reporting standards.
Currently, there is no single international standard for ESG reporting, but several frameworks and standards coexist, including the Global Reporting Initiative (GRI), the Task Force on Climate-related Financial Disclosures (TCFD), and others. SASB's standards are designed to be industry-specific, which enables a more targeted approach to ESG reporting compared to more general frameworks. Many stakeholders, including investors and regulatory bodies, are recognizing the importance of standardized ESG disclosures. As such, there is a possibility that SASB, with its emphasis on materiality and comparability, could gain widespread acceptance in the ESG reporting domain.
However, the alignment or merger of different frameworks, including an initiative to create a comprehensive global sustainability reporting framework under the International Financial Reporting Standards (IFRS) Foundation, could affect SASB's position as a standalone standard. The future of ESG reporting standards is still evolving, and while SASB may play a crucial role, whether it will become the universal standard is uncertain and dependent on the convergence of reporting frameworks and regulatory endorsement.