Posted by Neno Duplan
Under recently published accounting standards, banks will now be called upon to report on their social and environmental impact. These new Sustainability Accounting Standards are backed by large investors, including the California state teachers’ pension fund, Calstrs, and were drawn up after negotiations with shareholders, accountants, and banks including Deutsche Bank, TD Bank, and Goldman Sachs.
According to the Financial Times, the new standards require “reporting of measures such as the greenhouse gas emissions of companies in which banks have investments, as well as the number of complaints handled by their compliance departments.”
Author of these new standards, the Sustainability Accounting Standards Board (SASB), is backed by non-profit donors and was launched in 2012 to create standards for reporting on non-financial data. The SASB writes standards industry by industry- last year it was for pharmaceuticals companies, and next month standards are due for the technology and communications industry.
The Financial Times states that further details on the financial services standards include “measures of the companies’ possible losses on insurance or mortgage lending from weather-related events, the number of data breaches involving customers’ information, and details of the results of stress tests under adverse economic scenarios.”
Chief executive of Calstrs, Jack Ehnes, recognized that there may be some initial hesitation about the new standards, but believed they would eventually come to be accepted. “There is a market need for these data, and as soon as investors start talking about them and looking at them… then I think we will move to that,” he said.