The Sustainability Accounting Standards Board, Insurance Companies and the SEC

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By Samuel P. Gunther, Richard H. Murray and Sheila A.S. Gunther (Nov. 13, 2014)

The Sustainability Accounting Standards Board recently released its Sustainability Accounting Standard for the insurance industry, presenting five issues that may be material to insurers. While the SASB standards are designed to facilitate disclosure to investors of environmental, social and governance data, the authors of this article contend the SASB failed to articulate a reasoned analysis or explanation of how it concluded that the prescribed disclosures may be material to reporting companies. Further, it is argued the SASB employs numerous terms with special intended meanings without disclosing their definitions, then proceeds to use those terms throughout the document, incorrectly assuming such terms are readily known and understood. Finally, the authors maintain that the flaws in the insurance standard create uncertainty in its application and render it inoperable.