Investors, Companies to Benefit from SASB’s Release of Provisional Standards for Health Care

In July of 2013, the Sustainability Accounting Standards Board (SASB) released its first set of industry-focused provisional standards focusing on the health care sector. The nonprofit SASB provides standards for use by publicly listed corporations in the U.S. in disclosing material sustainability issues for the benefit of investors and the public.

 

The SASB report focuses on non-financial issues that have a material impact on health care companies, including resource management, drug safety and side effects, ethical marketing, affordability and fair pricing, managed care price performance, safety of clinical trial participants and more. Six health care industries are included, ranging from biotechnology, pharmaceuticals, and medical supplies and equipment to health care delivery, health care distributers and managed care.

 

These standards are designed to help corporations comply with Regulation S-K, which requires them to report all material issues. These standards provide investors with a more complete view of a company’s risk and opportunities when facing new regulations, limited resources and global sustainability challenges. One such example of an issue that will affect health care companies is the Affordable Health Care Act. To this end, the SASB focused on a number of issues pertinent to the Act, including patient satisfaction, electronic health records, quality of care, patient privacy and access for low-income patients.

 

While this type of material information is often available, it is not always accessible to investors. Information included in the SASB standards, for example, includes what products are listed on the FDA’s MedWatch safety alerts for medical products, and the agency’s Adverse Event Reporting System. These standards are expected to result in the improved performance of 13,000-plus corporations, representing more than $16 trillion in funds, on the highest-priority environmental, social and governance issues.

 

In the future, SASB will release provisional sustainability accounting standards for the financial sector and the technology and communications sector.