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Developing an ESG Reporting Framework for Electric, Water, and Gas Utilities using SASB and TCFD

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Russ Hissom's picture
Owner, Utility Accounting Education Specialists -

Russ is the owner of Utility Accounting Education Specialists a firm that provides power utilities consulting services and online/on-demand courses on accounting, finance, FERC best-practices,...

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  • Mar 3, 2022

SASB reporting metrics are a model for ESG reporting

Sustainability reporting using E (Environmental), S (Social), and G (Governance) or ESG standards should be part of your electric, water, and gas utility’s financial reporting model. This article discusses the reporting measures and metrics issued by the Sustainability Accounting Standard’s Board (SASB) for electric, gas, and water utilities and cooperatives. We also have a brief update on the state of the bodies that have been involved with issuing sustainability reporting measures.

Article takeaways

  1. The SEC is expected to issue requirements for mandatory disclosures in 2022.

  2. The Sustainability Accounting Standards Board offers robust metrics for 77 industries. Here we discuss electric, gas, and water utilities.

  3. Measuring the SASB standards involves developing business processes to build a reporting framework that becomes part of the normal business cycle of financial reporting.

  4. The Task Force on Climate-related Financial Disclosures (TCFD) has developed a reporting model whose focus is on climate disclosures and management’s approach to climate risk. This reporting is coupled with SASB metrics in a reporting framework.

This article discusses the approach of the SASB since that approach fits well with the accounting/finance/reporting structure of what many US companies follow with other accounting standards. Included are examples of recent reporting of ESG metrics.

SEC activities

The Securities and Exchange Commission (SEC) is taking a more active role in sustainability reporting by the public company entities that it oversees.

It is expected that the SEC will propose mandatory ESG disclosures for public companies in 2022. The SEC chair has asked staff to draft rules that require disclosures for leadership management of climate issues, metrics, and other quantitative measures. The rules will include the feasibility of drawing from an established ESG disclosure framework, such as an established ESG disclosure framework, such as the framework under development by the Task Force on Climate-related Financial Disclosures (TCFD) whose focus is on climate disclosures and management’s approach to climate risk. The proposed rules will require mandatory disclosures and cover areas of board diversity, climate change, and human capital management.

Many SEC organizations already report on some ESG metrics. Still, with mandatory disclosure requirements on the horizon, developing a framework for measuring ESG metrics would be prudent, making a transition to disclosures an easier path.

SASB standards

The Sustainability Accounting Standards Board (SASB) was founded in 2011 and has established benchmarks and reporting metrics for a number of ESG measures. It offers a robust series of ESG measures for 77 industry types. SASB has developed a reporting framework that measures the current state of ESG measures in an organization and management’s plan and approach towards improving or changing the trajectory of ESG measures.

Regarding SASB standards, management can choose which metrics to disclose as SASB states that the disclosures must be relevant and meaningful. The SEC considerations above will make disclosures mandatory.

SASB standards for electric, gas, and water utilities

We will focus on the ESG measures for the electric, gas, and water industry groups for this article. Perhaps your organization already measures some of these metrics, just not in the reporting format of the SASB.

Electric standards

The general metrics for Electric Utilities and Power Generators include:

1. Greenhouse gas emissions and energy resource planning

a. Measures and strategies to manage emissions

2. Air quality

a. Pollutants of various types

3. Water management

a. Water management in connection with the electric generation process

4. Coal ash management

a. Coal residuals and amounts recycled

5. Energy affordability

a. Customer rates, typical bills, and disconnects

6. Workforce health and safety

a. Safety incidents

7. End-use efficiency and demand

a. Percentage of revenues from decoupling

b. Customer gas savings from efficiency measures

8. Nuclear safety and emergency management

a. Nuclear capacity and safety management

9. Grid resiliency

a. Reliability measures and NERC standards compliance

10. Management of the legal and regulatory environment

11. Community impacts of project siting

Gas standards

The general metrics for Gas Utilities and Distributors include:

1. Energy affordability

a. Customer rates, typical bills, and disconnects

2. End-use efficiency

a. Percentage of revenues from decoupling

b. Customer gas savings from efficiency measures

3. Integrity of gas delivery infrastructure

a. Pipeline incidents

4. Operational safety - emergency preparedness and response

a. Types of distribution pipeline

b. Pipeline inspections

c. Managing the integrity of the system

Water standards

The general metrics for the Water Utilities and Services Industry include:

1. Energy management

a. Energy used in water delivery

2. Distribution network efficiency

a. Water losses and replacement of water

3. Effluent quality management

a. Management of water quality permit requirements

4. Water affordability and access

a. Water rates

5. Drinking water quality

a. Water contaminant management

6. End-use efficiency

a. Water revenues from conservation rates

7. Water supply resilience

a. Water recycling and resource management

8. Network resiliency and impacts of climate change

a. Water service disruptions, management of water in connection with risks and opportunities related to the impact of climate change


Business processes for metrics measurements

Business processes that need to be in place to record these metrics include power plant emissions tracking, OSHA reporting statistics for safety, revenue recognition, nuclear plant management reporting, electric system reliability tracking, rate case management, water and gas distribution management, water effluent reporting, and local project impacts. Many of these processes are already in place in your co-op or utility and the ESG metric inputs are already available. The key is using a framework for reporting.

A framework for reporting

As we just said in the previous section, :) a consistent framework for reporting will enhance highlighting ESG measures and potentially meet the requirements for potential regulatory reporting. The SASB standards include detailed calculations for each of the ESG measures and recommended reporting. The SASB measures, coupled with a TCFD framework, makes for a robust reporting model. For example, the American Electric Power (AEP) 2021 SASB Report has a combination of SASB and TCFD reporting that reflects AEP’s risk management approach to emissions. We aren't able to copy the screen shots of the report in this format, but urge you to check out the report for an example of straight-forward, in-depth reporting. 


Steps towards developing an ESG reporting framework

While a focused approach will be needed to develop a framework for these measures, the measurement approach develops business processes that will become part of your organization’s operations.

Even though the SEC will mandate ESG reporting metrics, this should not be viewed as another “reporting requirement”, nor should non-SEC entities breathe a sigh of relief that they do not need to report on ESG measures. Like most reporting measures, there is a trickle-down effect of standards, and we see the greater societal expectation on ESG reporting.

ESG reporting is now a best practice for a wholistic reporting of an organization’s business and part of the stewardship responsibility for the privilege to be in business and serve customers. The approach should showcase a utility’s approach to how it invests in managing ESG and sustainability, risk and how ESG fits into the organization’s long-term strategy.



About Russ Hissom - Article Author

Russ is the owner of Utility Accounting Education Specialists. Russ is passionate about the Electric and Telecom Industries and his goal is to share industry best-practices to help better your business and enhance your career knowledge. He has over 35 years serving electric investor-owned and public power utilities, electric cooperatives, and telecom providers as a past partner in a national public accounting and consulting firm's energy practice. Russ was named one of the 2021 Top Voices in the Energy Central Community by EnergyBiz Network.

Find out more about about Utility Accounting Education Specialists here or you can reach Russ at


The material in this article is for informational purposes only and should not be taken as legal or accounting advice provided by UAES. You should seek formal advice on this topic from your accounting advisor.



Matt Chester's picture
Matt Chester on Mar 3, 2022

So important for apples to be able to be compared with apples, so I look forward to more unified ESG reporting frameworks as you lay out

Russ Hissom's picture
Thank Russ for the Post!
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