Large investors encouraged use of SASB framework to provide decision-useful ESG information.
Feedback from investors played an important role in Verizon’s decision to publish its 2019 ESG Report using standards framed by the Sustainability Accounting Standards Board (SASB), according to Beth Sasfai, SVP for Corporate Governance and Chief ESG Officer for the US telecoms giant.
Verizon’s ESG team transitioned from corporate responsibility reporting to investor-focused ESG reporting earlier this year. Previously called the ‘Corporate Responsibility Report’, the firm’s non-financial reporting has been consolidated and renamed as the annual ESG report, which includes an SASB index to measure the alignment of Verizon’s disclosures with SASB’s standards for the telecommunications sector.
Verizon solicited the opinions of shareholders on a variety of topics related to their ESG-based information needs. “Our institutional investors were unanimous in their belief that ESG needs to be integrated into investment decisions and that this requires more transparent, standardised reporting that prioritises those ESG issues that are most important for our industry and that align with our core business strategy,” Sasfai wrote, in a blog entry on the standard-setter’s website.
While shareholder feedback acknowledged that no framework is perfect, many of the firm’s largest investors strongly encouraged it to use the SASB framework as their preferred way to provide decision-useful ESG information about Verizon’s business activities and strategy, she added.
Topics covered in Verizon’s 2019 ESG Report include the firm’s environmental footprint, data privacy and security, the amount of e-waste recovered and recycled, how it manages business continuity risk, competitive behaviour and the open internet.
Elaborating on the process, Sasfai said, “We were easily able to identify the standard that best applied to our business and we then evaluated our existing reporting against the recommended disclosure topics and metrics from SASB. We discovered that certain of our existing disclosures already aligned with the SASB Telecommunications Services standard and we decided that was a good starting place to bring our first SASB index to life.”
Sasfai said the exercise highlighted areas for potential improvement in the firm’s reporting processes and stressed the need to educate senior leadership in order to gain the required resources. Where Verizon could not yet supply the figures required by SASB’s standards, Sasfai said honesty was the best policy.
“In these instances, we have been as transparent as possible, noting how the metric we do report differs from the SASB metric or explaining why we can’t provide the data point in the requested format and linking to other relevant content in our ESG report,” she said.