In a recent letter to the Sustainability Accounting Standards Board (SASB), AMWA submitted its comments on the Board’s draft sustainability accounting standard for water utilities, noting that it misrepresents water sector utilities.
SASB was incorporated in 2011 to develop sustainability accounting standards for the disclosure of “material sustainability information in mandatory SEC filings,” for publicly traded companies. Although AMWA members are not publicly traded companies, the degree to which bond ratings or lending decisions may be influenced by SASB’s proposed standard is of concern.
In an initial letter to SASB on January 4, 2016, AMWA stated that a lack of early and direct outreach to the association and other water sector organizations was a significant oversight and led to a draft standard that is “flawed and in need of significant additional work before it should be considered.” After gathering input from its Sustainability Committee, AMWA submitted a follow-up letter, stating, “Upon further review [of] SASB’s proposed Water Utilities Sustainability Accounting Standard, AMWA has concluded that the draft standard misrepresents water sector utilities due to many gross inaccuracies, including differences between publicly owned and privately owned utilities and water, wastewater and stormwater utilities.” AMWA’s letter provides examples of the association’s concerns with the draft.
On January 21, AMWA staff spoke with a lead analyst at SASB to better understand SASB’s process and discuss potential next steps for engagement between SASB and AMWA. SASB staff characterized the future standard as a voluntary tool for communicating to investors about sustainability topics. SASB told AMWA it will release a provisional standard on March 30 and spend the remainder of 2016 further consulting with stakeholders and soliciting feedback to “continue to improve the standards, including their accuracy, decision-usefulness, and cost-effectiveness.”
AMWA will continue to update members as its conversation with SASB progresses.