Question

Which of the following is not true about SASB?

1) a is mandatory
2) is a set of standards for financial disclosures based on ESG topics that are material to a company's financial performance
3) it is industry specific
4) it is designed for investors as primary audience, to provide the information needed to make the most informed investment decisions possible

Answer 1

The incorrect statement about SASB is that 'a is mandatory'. SASB provides voluntary, yet industry-specific standards designed to help investors by informing them about material ESG topics relevant to companies' financial performance.

Step-by-step explanation:

The statement about SASB (Sustainability Accounting Standards Board) that is not true is option 1) a is mandatory. SASB provides voluntary standards for reporting sustainability information that could be material to investors.

SASB's standards are indeed industry-specific, covering issues that are likely to be important to financial performance within a particular industry. The standards are intended primarily for investors, aiding them in making informed decisions by understanding how companies manage their ESG (Environmental, Social, and Governance) risks and opportunities. These guidelines, while influential and increasingly adopted by companies, are not mandatory unless prescribed by regulation in a specific jurisdiction.

While SASB guidelines have gained recognition and are used by many organizations, they remain voluntary and have not achieved a status where all companies are legally required to follow them. Companies may opt to use these standards to enhance the transparency and relevance of their financial disclosures related to ESG issues.