Part I-3 Evaluating Sustainability Issues

Question 1

SASB research team uses the five-factor test to

Answer 1

surface possible sustainability topics for disclosure and determine the likelihood they will have financially material impacts on companies in a given industry. the five factors are:

1. Direct Financial Impacts and Risk
2. Legal, Regulatory, and Policy Drivers
3. Industry Norms, Best Practices, and Competitive Drivers
4. Stakeholder Concerns and Social Trends
5. Opportunities for Innovation

Question 2

What are the SASB Five factors?

Answer 2

Direct Financial Impacts and Risk
Legal, Regulatory, and Policy Drivers
Industry Norms, Best Practices, and Competitive Drivers
Stakeholder Concerns and Social Trends
Opportunities for Innovation

Question 3

SASB standards are tied to specific types of financial impact under three broad categories:

Answer 3

revenues and costs, assets and liabilities, and cost of capital

Question 4

This one of the Five Factors relates to existing, emerging or evolving regulations and policies, which have the potential to create risks or opportunities for companies

Answer 4

Legal, Regulatory and Policy Drivers

Question 5

T/F - Operating location plays a role in determining the extent to which industries and the companies within them are affected by legal, regulatory and policy drivers

Answer 5

True

Question 6

This factor is typically associated with sustainability topics that have a high degree of disclosure, including publicly available, benchmarked data

Answer 6

Industry norms, best practices and competitive drivers

Question 7

Industries associated with Stakeholder concerns and social trends tend to be

Answer 7

customer-facing and/or require a social license to operate

Question 8

Several types of sustainability topics are linked to Stakeholder concerns and social trends:

Answer 8

Product-related topics: health and nutrition, product environmental efficiency, and product safety
Operations-related topics: health, safety and well-being and prosperity of stakeholders

Question 9

How can stakeholders make Use of the findings across the five factors?

Answer 9

Assessing risks and opportunities, and have dialogue with management