COVER PAGESubmitted To Don PrynznykCourse Hospitality Accounting

COVER PAGESubmitted To: Don PrynznykCourse: Hospitality
Accounting (ACCT-335-A)Section:ASubmitted By:Nhung
Dinh833267Neelanjana Khondkar847861Ana Lara827210
CASE1DEWEY, CHEETUM AND HOWE - FINE
DININGMASTER BUDGET PREPARATION - PART 2-
6WORTH 30% OF YOUR FINAL GRADEBecause of your
financial knowledge you have asked to prepare budgeted
financial statements and supporting schedulesfor the restaurant's
first year of operations. It has been suggested that you prepare
this information for each quarter andfor the year. You have been
provided with the following researched information to help you
with your preparation and youhave also been provided with
opening account balances as per section J.ABudgeted sales for
each quarter and the year are as follows:For the
year$835,0001st quarter27%76%is generated from food
sales2nd quarter23%24%is generated from beverage sales3rd
quarter20%4th quarter30%BYour fixed salaries for the year
are…………………………………………………………….$199,80
0Your variable salaries expressed as a percentage of sales
are…………………………….5.9%Your employee benefits
program costs expressed as a % of total gross
salaries……….10.8%All salaries are paid in the quarter in
which they are incurred. Employee benefits are accrued and
paid in the quarter after the accrual.CYour quarterly fixed rent
expense which is paid on the first of each quarter
is…………….$4,000Your quarterly variable rent expense
expressed as a percentage of sales is………………5.0%Variable
rent expense is accrued and is paid in the quarter after the
benefit is received.DYour total sales are comprised
of:………………...………………………..Credit card
sales70%……………………………………………………...………
…………………………Cash
sales20%………………………………………………………..……
…..………………Sales on account10%Your credit card

commissions expense which is deducted by the financial
institution is..2.5%Previous collection experience provides you
with information on collection patterns as follows:Credit cards
sales-in the quarter of
sale………………………………………………………..80%Credit
card sales-in the quarter following
sale………………………………………………….20%Sales on
account are collected in the quarter following the sale.EThe
following other annual expenses have been given and are
incurred evenly through out the year and are paid quarterly as
incurred:Advertising and
promotion15,000Miscellaneous1,200Bank
charges1,200Office1,200Business tax and
licenses7,000Professional
fees6,000Delivery1,200Printing4,000Repairs and
maintenance4,000Laundry and
uniforms7,000Supplies2,000Telephone
2,400Travel2,000FUtilities are paid quarterly and are incurred
monthly as follows:Fixed$350Variable0.5%of SalesGYour
initial bank loan (see opening Balance Sheet) was obtained at an
interest rate of…12.0%and is paid each quarter along with the
principal payment of……………………………….$15,000You
are required to maintain a minimum quarterly cash balance
of………………………..$9,000You have negotiated an operating
line of credit
of…………………………………………….$50,000Your annual
rate of interest on the operating line of credit
is………………………………..18.0%You may borrow and repay
loan amounts in increments
of………………………………….$1,000Continued
CASE2HDepreciation on assets is as
follows:Rate/TimeLeasehold improvementsDeclining balance
method……………………28%Kitchen and bar
equipmentDeclining balance
method……………………28%Furniture and
EquipmentDeclining balance

method……………………28%China and glass packageStraight
line method - no salvage value…….6YearsICost of sales for
food expressed as a percentage of food sales
is………………………….40%Cost of sales for beverages
expressed as a percentage of beverage sales
is……………..25%The restaurant would like to maintain ending
inventories based on an amount equal toa specific percentage of
next quarters cost of sales:…………………….…...…….for
food15.0%……………………………………………………………
……………………...…for beverages40.0%Combined projected
food and beverage sales for the first quarter of year 2
are……………$250,000All purchases of food and beverages are
paid for as follows: In the quarter of
purchase….67%………………………………………………………
..……In the quarter following purchase…33%JThe opening
account balances as of the beginning of the current fiscal year,
January 1:Inventory-food$10,000Interest
payable$1,250Inventory-liquor7,000R.Dewey,
capital61,946Prepaid insurance2,400O.Cheetum,
capital61,946Service deposits2,450B.Howe,
capital61,946Leasehold improvements352,000M.E.Fine,
capital61,946Kitchen and bar equipment120,000Accounts
payable17,000Furniture and fixtures115,000Cash10,800China
and glass package8,000Benefits payable666Operating line
payable10,000Bank loan payable-long term290,950Bank loan
payable-current60,000KIt was decided that the restaurant would
be called Dewey, Cheetum, and Howe - Fine DiningLLabel your
worksheets as follows: Sheet 1-SALES AND COLLECTIONS
Sheet 2-PURCHASES AND DISBURSEMENTS Sheet 3-CASH
BUDGET Sheet 4-INCOME STATEMENT Sheet 5-
BALANCE SHEETREQUIRED:(A)Prepare a sales budget for
food and beverages for each quarter and the year. (sheet 1
)(B)Prepare a detailed schedule of cash collections for each
quarter and for the year. (sheet 1)(C)Prepare a separate
purchase budget for food and beverage for each quarter and the
year. (sheet 2)(D)Prepare a schedule of cash disbursements of

inventory purchases for each quarter and the year. (sheet
2)(E)Prepare a cash budget for each quarter and for the year.
(sheet 3)(F)Prepare a budgeted income statement for each
quarter and for the year. (sheet 4)(F)Prepare a budgeted balance
sheet for the end of the fiscal year. (sheet 5)
SALES AND COLLECTIONSDEWEY, CHEETUM AND
HOWE - FINE DINING Sales BudgetFor quarters
and the year ended1st quarter2nd quarter3rd quarter4th
quarterFor the yearFood
Sales171342145958126920190380634600Beverage
Sales54108460924008060120200400Total
Sales225450192050167000250500835,000DEWEY, CHEETUM
AND HOWE - FINE DINING Cash Collections Budget For
quarters and the year ended1st quarter2nd quarter3rd quarter4th
quarterFor the
yearCash45090384103340050100167000Credit15781513443511
6900175350Sales on Account225451920516700250501st
quarter123095.730773.925153869.6252nd
quarter104859.326214.825131074.1253rd
quarter9118222795.5113977.54th quarter136773136773Total
cash collections
168185.7196588.225170001.825226368.5761144.25SALESACC
OUNTS RECEIVABLECash20%Sales on account of 4th quater
collected in the first quarter of year 225050Credit70%4th
quarter credit sales collected the first quarter of year
234193.25Sales on account10%Credit card mission
expense2.50%Quarter of sales80%Quarter of following
sales20%Sales on accounts are collected in the quarter
following the saleCC mission expense 1st quater2nd quater3rd
quarter4th quarter3156.33477.7753010.1754091.5CC mission
expense ofquarter of following sales in 4th quarter876.75
PURCHASES AND DISBURSEMENTSDEWEY, CHEETUM
AND HOWE - FINE DININGPurchase Budget For FoodFor
quarterThe yearBEGINNING
INVENTORY100008757.487615.211422.810000???ADD:

PURCHASES67294.2857240.9254575.676129.2255240COST
OF GOODS AVAILABLE FOR
SALE77294.2865998.462190.887552293035.48LESS: ENDING
INVENTORY8757.487615.211422.81140011400???COST OF
GOODS SOLD68536.858383.25076876152253840 Income
statementDEWEY, CHEETUM AND HOWE - FINE
DININGPurchase Budget For BerverageFor quarters and the
year ended1st quarter2nd quarter3rd quarter4th quarterThe
yearBEGINNING
INVENTORY70004609.2400860127000???ADD:
PURCHASES11136.210921.8120241501849100COST OF
GOODS AVAILABLE FOR
SALE18136.215531160322103070729.2LESS: ENDING
INVENTORY4609.24008601260006000????COST OF GOODS
SOLD1352711523100201503050100DEWEY, CHEETUM AND
HOWE - FINE DININGCash Disbursements for PurchasesFor
quarterThe yearACCOUNTS
PAYABLE1700000017000CURRENT
PURCHASES52548.421645669.022444621.73261068.62420390
7.8PRIOR
PURCHASES025882.058422493.697621977.86870353.624TOT
AL CASH
DISBURSEMENTS69548.421671551.080867115.429683046.49
2291261.424Cost of sales for food40%Purchases are paid
for:Cost of sales for beverages is 25%In quarter of
purchase67% Ending inventories at a % of next quarters cost of
sales:In quarter of following purchase33%For
food15%Combined projected food and250000For beverages
40%beverage sales for the first quarter of year 2ACCOUNT
PAYABLE4th quarter purchase paid in the first quater of year
230078.576
CASH BUDGETDEWEY, CHEETUM AND HOWE - FINE
DINING Cash Collections Budget For quarters and the year
endedBeginning cash108001st quarter2nd quarter3rd quarter4th
quarterThe yearSalaries-fixed for year199800Salaries-variable (

as % of sales)5.90%BEGINNING
CASH1080018837.978439694.755243272.30810800Employee
benefits10.80%Utilities-fixed350CASH RECEIPTS:Utilities-
variable0.50%Rent-fixed4000CASH
COLLECTIONS168185.7196588.225170001.825226368.576114
4.25Rent-variable (as % of salaries)5%CASH
AVAILABLE178985.7215426.2034209696.5802269640.808771
944.25 Annual expenses have been given and areincurred evenly
through out the year and are paid CASH
DISBURSEMENTS:Advertising and promotion15000Bank
charges1200Inventory
purchase69548.421671551.080867115.429683046.492291261.42
4Business tax and licenses7000Salaries-
fixed49950499504995049950199800Delivery1200Salaries-
variable13301.5511330.95985314779.5492 65Laundry and
uniforms7000Employee
benefits6666831.16746618.34266458.72420574.234Telephone
2400Rent-
fixed400040004000400016000Miscellaneous1200Rent-
variable011272.59602.5835029225Office1200Utilities-
fixed10501050105010504200Professional fees6000Utilities -
variable3381.752880.7525053757.512525Printing4000Advertisi
ng and promotion375037503750375015000Repairs and
maintenance4000Bank
charges3003003003001200Supplies2000Business tax and
licenses17501750175017507000Travel2000Delivery3003003003
001200Laundry and uniforms17501750175017507000Telephone
6006006006002400 Bank loan interest
rate12.0%Miscellaneous3003003003001200Principal payment
15000Office3003003003001200Minimum quarterly cash
balance9000Professional fees15001500150015006000Operating
line of credit50000Printing10001000100010004000Annual rate
of interest on the operating line18.0%Repairs and
maintenance10001000100010004000Borrow/repay loan amounts
in increments
1000Supplies5005005005002000Travel5005005005002000Inter

est Expense1700315180902285Total cash
disbursements:157147.7216172731.4482164424.2722185032.21
6679335.658Payable AccruedEmployee benefit6990.786Cash
Excess/Deficiency21837.978442694.755245272.30884608.5929
2608.5919999998Rent- variable payable12525Borrow/ Repay
loan-3000-3000-2000-2000-10000Ending
Cash18837.978439694.755243272.30882608.59282608.5919999
998Operating Loan Balance1000070004000200000
INCOME STATEMENTDEWEY, CHEETUM AND HOWE -
FINE DINING1ST QUATER2ND QUATER3RD QUATER4TH
QUATERFOR THE YEARBeginning cash10800Salaries-fixed
for
year199,800Sales225450.0192050.0167000.0250500.0835000.0
Salaries-variable ( as % of sales)5.90%costs of goods sold-
beverage1352711523100201503050100Employee
benefits10.80%costs of goods sold-
food68536.858383.25076876152253840Utilities-fixed350Gross
profit on sales143386.2122143.8106212159318531060Utilities-
variable0.50%Rent-fixed4000operating expenses:Rent-variable
(as % of salaries)5%salaries -
fixed49,95049,95049,95049,950199,800salaries -
variable13301.5511330.95985314779.549265Advertising and
promotion15000benefits6666831.16746618.34266458.72420,57
4Bank charges1200rent
expense400040004000400016000Business tax and
licenses7000supplies expenseDelivery1200miscellaneous
expenses1200Laundry and uniforms7000utilities expenses -
fixed 3503503503501400Telephone 2400utilities expenses -
variable1127.25960.258351252.54175Miscellaneous1200Rent-
fixed400040004000400016000Office1200Rent-
variableProfessional fees6000Advertising and promotion
expenses15000Printing4000Bank charges expense1200Repairs
and maintenance4000Business tax and
licenses7000Supplies2000Delivery1200Travel2000Laundry and
uniforms7000Telephone 2400Office1200Professional
fees6000Printing4000Repairs and

maintenance4000Supplies2000Travel2000Interest
Expense1700Total Operating
expenses73,394.877,422.475,606.380,790.7363,114Net
Income69,991.444,721.430,605.778,527.3167946
BALANCE SHEETDEWEY, CHEETUM AND HOWE - FINE
DININGBUDGETED BALANCE SHEETAS AT DECEMBER
31,_____________ASSETSCURRENT ASSETS:CashAccounts
ReceivableInventory - food Inventory - beverageService deposit
prepaid insurance TOTAL CURRENT ASSETSPROPERTY
AND EQUIPMENT:Leasehold improvements352,000Less:
Accumulated AmortizationKitchen and bar
equipment120,000Less: Accumulated AmortizationFurniture
and Equipment115,000Less: Accumulated AmortizationChina
and glass package8,000Less: Accumulated AmortizationTOTAL
PROPERTY AND EQUIPMENTLIABILITIES AND OWNERS
EQUITYLIABILITIESCURRENT LLIABILITIES:Accounts
PayableUtilities PayableEmployee Benefits PayableSalaries
PayableTOTAL LIABILITIESOWNERS EQUITYR.Dewey,
capital61,946O.Cheetum, capital61,946B.Howe,
capital61,946M.E.Fine, capital61,946TOTAL LIABILITIES
AND OWNERS EQUITY
© 2018 The SASB Foundation. All rights reserved.
TECHNOLOGY & COMMUNICATIONS SECTOR
Sustainable Industry Classification System® (SICS®) TC-SI
Prepared by the

Sustainability Accounting Standards Board
October 2018
sasb.org
Software & IT Services
BASIS FOR CONCLUSIONS
BASIS FOR CONCLUSIONS | SOFTWARE & IT SERVICES
INDUSTRY
About SASB
The SASB Foundation was founded in 2011 as a not-for-profit,
independent standards-setting organization. The
SASB Foundation’s mission is to establish and maintain
industry-specific standards that assist companies in
disclosing financially material, decision-useful sustainability
information to investors.
The SASB Foundation operates in a governance structure
similar to the structure adopted by other
internationally recognized bodies that set standards for

disclosure to investors, including the Financial
Accounting Standards Board (FASB) and the International
Accounting Standards Board (IASB). This structure
includes a board of directors (“the Foundation Board”) and a
standards-setting board (“the Standards Board” or
“the SASB”). The Standards Board develops, issues, and
maintains the SASB standards. The Foundation Board
oversees the strategy, finances and operations of the entire
organization, and appoints the members of the
Standards Board.
The Foundation Board is not involved in setting standards, but
is responsible for overseeing the Standards
Board’s compliance with the organization’s due process
requirements. As set out in the SASB Rules of
Procedure, the SASB’s standards-setting activities are
transparent and follow careful due process, including
extensive consultation with companies, investors, and relevant
experts.
SUSTAINABILITY ACCOUNTING STANDARDS BOARD
1045 Sansome Street, Suite 450
San Francisco, CA 94111

415.830.9220
[email protected]
sasb.org
The information, text, and graphics in this publication (the “Con
tent”) are owned by The SASB Foundation. All rights reserved.
The Content may
be used only for non‐ commercial, informational, or scholarly u
se, provided that all copyright and other proprietary notices rela
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Content are kept intact, and that no modifications are made to th
e Content. The Content may not be otherwise disseminated, dist
ributed,
republished, reproduced, or modified without the prior written p
ermission of The SASB Foundation. To request permission, plea
se contact us at
[email protected]
INDUSTRY
Table of Contents
Introduction
...............................................................................................
.............................................................. 4
The Standards Board
...............................................................................................

............................................ 4
Development of the Sustainability Accounting Standards
.................................................................................... 4
Approval of the Industry Standard
...............................................................................................
........................ 5
Future Updates to the Standards
...............................................................................................
.......................... 6
Revision TC-SI:01 – Industry: Software & IT Services; Topic
Name: Environmental Footprint of Hardware
Infrastructure
...............................................................................................
............................................................ 7
Name: Environmental Footprint of Hardware
Infrastructure
...............................................................................................
............................................................ 9
Name: Data Privacy & Freedom of Expression .. 11
Name: Data Privacy & Freedom of Expression .. 14
Name: Data Security ........................................... 16
Name: Data Security ........................................... 19

Name: Recruiting & Managing a Global, Diverse
& Skilled Workforce
...............................................................................................
............................................... 22
Name: Intellectual Property Protection &
Competitive Behavior
...............................................................................................
............................................ 25
Appendix A. Standards Board – Sector Committee Assignments
..................................................................... 27
Appendix B. Redline Metric Tables
...............................................................................................
....................... 28
INDUSTRY | 4
Introduction
The publication of the Sustainability Accounting Standard
(“Standard”) for the Software & IT Services Industry marks
an important milestone for the industry and for global capital
markets more generally. It is the first Standard designed

to assist companies in the Software & IT Services industry in
disclosing financially material, decision-useful
sustainability information to investors.
The Software & IT Services Industry Standard was first released
in a provisional form in June 2015 after an extensive
standard-setting process. Following the release of the
Provisional Standard, the SASB staff, under the guidance of the
SASB standard-setting board (“the Standards Board” or “the
SASB”), engaged in further due process to revise the
Standard. In October 2018, the Standards Board approved
revisions to the Standard. The Standards Board
subsequently voted to approve the Software & IT Services
Industry Standard, thereby including it in as one of the 77
industries for which the SASB has developed and published an
industry standard.
The Basis for Conclusions describes the rationale for revisions
made to the provisional industry standard. Additionally,
the document outlines the standard-setting process the
Standards Board used to codify the standard. All standard-
setting documentation, including prior drafts of the standard,
summary reports, and comment letters, which informed
the development of the standard, are publicly available at the
Standard Setting Archive of the SASB website.

The Standards Board
The Standards Board is charged with developing, issuing, and
maintaining SASB standards. The Standards Board
operates in accordance with its primary governance documents,
including the SASB’s Conceptual Framework and
Rules of Procedure. The Conceptual Framework sets out the
basic concepts, principles, definitions, and objectives that
guide the Standards Board in its approach to setting standards.
The Rules of Procedure establishes the due process
followed by the Standards Board and staff in their standard-
setting activities. The standard-setting process is designed
to ensure each industry standard reflects the core objectives
established in the Conceptual Framework to facilitate
companies’ cost-effective reporting of financially material and
decision-useful sustainability information to investors.
In its standard-setting role, the Standards Board operates in a
transparent manner, including holding public board
meetings. The Standards Board currently uses a sector-based
committee structure, with three Standards Board
members assigned primary responsibility for each given sector.
In addition to sector committee reviews, the full
Standards Board evaluates revisions to the standards.
Information on Standards Board meetings, including minutes,
agendas, and a schedule of upcoming meetings is available on

the SASB website. A list of Standards Board members
and their respective sector committee assignments is included in
Appendix A.
Development of the Sustainability Accounting Standards
SASB staff initiated its standard-setting activities in 2012 under
the oversight of the Standards Council.1 From August
2012 to March 2016, the SASB staff developed provisional
standards for each of the industries identified in the
Sustainable Industry Classification System® (SICS®).2 The
provisional standards were developed through an iterative
1 The Standards Council served in a process oversight role,
distinct from the standard-setting role the Standards Board
serves in. Upon
completion of the provisional phase in 2016, the Standards
Council was disbanded.
2 At the time of the development of the provisional standards,
SICS® contained 79 industries. SICS® was subsequently
revised to 77
industries as a result of the combining of industries that
contained similar sustainability-related risk and opportunity
characteristics.
INDUSTRY | 5

and transparent process centered on independent research,
market input, and oversight from the Standards Council.
Each provisional industry standard was developed based on staff
research, industry working group (“IWG”) feedback,
public comments, and individual consultations with companies,
investors, and other relevant experts. Throughout the
development of the provisional standards, more than 2,800
individuals participated in IWGs, 172 public comment
letters were received, and hundreds of individual consultations
were conducted with market participants by the SASB
staff.
In 2016, following the issuance of the provisional standards
across all industries, the SASB staff initiated a dedicated
market consultation period to gain further insight into market
views on the provisional standards. Subsequently, the
Standards Board was seated and initiated a due process phase
that culminated in the codification of 77 industry
standards in October 2018. This standard-setting phase that
began with the provisional standards and concluded with
the codified standards is described more fully below. All
standard-setting documentation discussed below are publicly
available at the Standard Setting Archive of the SASB website.
Consultation: In the six-month period from Q4 2016 – Q1

2017, the SASB staff conducted
consultations to gather additional input from companies,
investors, and relevant experts on the
provisional standards. Throughout this phase, the SASB staff
received input on the complete set of
industry standards from individual consultations conducted with
141 companies, 19 industry
associations, and 271 investor consultations via 38 institutional
investors. The Consultation Summary
comprises the findings from the consultations.
evaluate market input from consultations
on the provisional standards, the Standards Board worked with
the SASB staff to publish the Technical
Agenda. The Technical Agenda formally lists the areas of focus
to address in preparing the standards
for codification, emphasizing those issues for which strong
evidence surfaced and/or those which
received significant market feedback during the consultation
period.
blic Comment Period: In October 2017, the Standards
Board published exposure drafts of the
standards, which incorporated proposed changes guided by the
Technical Agenda to the provisional

standards. This opened a 90-day period, subsequently extended
to a 120-day period, from October
2017 to January 2018, for public comment and review of
proposed changes to provisional standards.
Market participants provided 120 comment letters during the
comment period. All letters received and
a Summary of Public Comments are available at the Standard
Setting Archive.
The Standards Board and the SASB staff evaluated the public
comments received in conjunction with previous market
input and research to determine the revisions to be made to the
provisional standard.
Approval of the Industry Standard
On October 13, 2018, the Standards Board voted unanimously to
revise the Provisional Standard for the Software & IT
Services industry. In light of these revisions, on October 16,
2018, the Standards Board voted unanimously in favor of
removing this Standard’s provisional status. In doing so, the
Standards Board considered all phases of the standard-
setting process, including those detailed in the above
documents, to assess their underlying rationale, their adherence
to due process, and their faithfulness to the essential concepts
of sustainability accounting, as described in the

Conceptual Framework.
INDUSTRY | 6
The following section of this document describes the rationale
for the revisions. Appendix B contains a redline table
that summarizes these revisions. Revisions relative to the
provisional standard that have not altered the scope or
content of disclosure topics or metrics, such as those that are
intended to improve the consistency, clarity, and
accuracy of the standard, are not specifically addressed in the
Basis for Conclusions.
Future Updates to the Standards
As social, economic, regulatory, and other developments alter
an industry’s competitive landscape, the SASB
standards may need to evolve to reflect new market dynamics.
The Standards Board will follow a regular standards
review cycle to address emerging and evolving issues that may
result in updates to the SASB standards.
The Standards Board intends to direct the SASB staff to compile
and publish a Research Agenda, which outlines items
that have been identified as requiring further analysis.
Evidence-based research and market input, including feedback

from outreach and consultation, will inform reviews of issues
on the Research Agenda. Items from the Research
Agenda may later be added to the Standards Board’s Technical
Agenda for additional due process and formal
deliberation. All updates are subject to the standard-setting
process described in the Rules of Procedure.
INDUSTRY | 7
Name: Environmental Footprint of Hardware Infrastructure
Summary of Change – Revise Technical Protocol
The SASB revised the technical protocol associated with
provisional metric TC0102-013 to ensure that regional
measures of renewable energy—such as Guarantees of Origin
(GOs), the European Union (EU) equivalent of the
United States’ renewable energy certificates (REC) (both units
of renewable energy credits)—are accounted for.
Adherence to Criteria for Accounting Metrics
The Software & IT Services Industry Provisional Standard
includes a topic, Environmental Footprint of Hardware
Infrastructure, with three associated metrics to describe a

company’s management of energy and water issues related
to their data center operations. Specifically, provisional metric
TC0102-01 specifies that companies should disclose the
total amount of energy they use, along with the percentages of
that energy from the grid or renewable sources. The
provisional technical protocol describes how the company
should calculate renewable energy, including the treatment
of renewable energy units. Although the provisional technical
protocol provides measurable, relevant guidance, it
lacks references to a more complete set of renewable energy
standards. To improve the completeness of the technical
protocol, the SASB revised the technical protocol to include
references to equivalent standards—notably, the GOs of
the European Union.
Supporting Analysis
Companies with a global footprint are likely to have RECs,
GOs, and other equivalent regional renewable energy units
on their books. This revision provided clarity that the SASB
recognizes GOs and other equivalents for reporting
purposes. Companies commonly report aggregated renewable
energy units, including equivalents (for which the
revised technical protocol provides guidance on). For example,
the 2015 Citizenship Report for largest (by market cap)

company in this industry uses a single line item to note the
renewable energy units it had purchased, but a footnote
indicates the figure includes “Renewable energy certificates
(RECs) in the United States, Guarantees of Origin in the
European Union, GreenPower instruments in Australia, and
GoldPower instruments in China, Taiwan, and Turkey.”4
Renewable energy units in different markets have subtle
differences, but ultimately are each equivalent to 1 MWh of
renewable energy produced, and have similar requirements for
retirement (so that they cannot be double-counted).
For example, the EU guideline 2009/28/EC mandated the
creation of national registries for the trade of GOs.5
Updating the technical protocol to account for additional
renewable energy markets helped the technical protocol
better fulfill the SASB Conceptual Framework’s attribute of
completeness.
Market Input
Investors: The revision was presented to investors and no
positive or negative feedback was received.
3 TC0102-01 – Total energy consumed, percentage grid
electricity, percentage renewable energy
4 “Microsoft 2015 Citizenshi p Report Environmental Data
Addendum,” Microsoft, 2015, accessed July 15, 2017, p. 3,
http://download.microsoft.com/download/7/3/6/736CED21-

9D8B-4CBB-98E8-
DCBAE7026251/Microsoft%202015%20Citizenship%20Report.
pdf.
5 “Directive 2009/28/EC of the European Parliament and of the
Council,” April 23, 2009, Official Journal of the European
Union, accessed
July 23, 2018, http://eur-lex.europa.eu/legal-
content/EN/ALL/?uri=celex%3A32009L0028.
INDUSTRY | 8
Companies: Multiple global companies raised the concern that
the provisional technical protocol did not recognize
renewable energy standards outside of the U.S. and expressed a
desire to ensure associated disclosures reflect the full
extent of their renewable energy efforts.
Benefits
Improves the SASB Standard: The inclusion of regionally
recognized renewable energy units beyond RECs improves
the completeness of the technical protocol by explicitly
acknowledging their place in the market as well as their
applicability to companies with different geographic profiles.

INDUSTRY | 9
Name: Environmental Footprint of Hardware Infrastructure
Summary of Change – Revise Metric
The SASB revised provisional metric TC0102-02 from “Total
water withdrawn, percentage recycled, percentage in
regions with High or Extremely High Baseline Water Stress” to
remove the component of the metric that measures
water recycling, and replace it with water consumption. The
resulting metric is, “(1) Total water withdrawn, (2) total
water consumed, percentage of each in regions with High or
Extremely High Baseline Water Stress.”
contains a topic, Environmental Footprint of Hardware
Infrastructure, which addresses corporate performance on
managing water-related risks and opportunities,
including operating impacts due to water stress or quality
issues, and regulatory risk or reputational factors, as well as
the management of hazardous waste. With respect to water,

provisional metric TC0102-02 provided a high-level view
of water use, as measured by water withdrawals and recycling,
and a company’s exposure to water stress within its
operations, as measured by water withdrawals in water stressed
regions. While provisional metric TC0102-02 was
comparable and distributive, it did not provide a representative
view of a company's performance with respect to
management of water stress and water use. The revision of the
metric to focus on water consumption as opposed to
water recycling provides a more complete view of water use and
related water risk.
Supporting Analysis
Companies in the industry are exposed to risks related to water
management that include dependence on water as an
input for the operation of their data centers.
Key aspects of water management include both consumpti ve and
non-consumptive use. Non-consumptive water use
is primarily impacted by factors relating to water access and
aggregate withdrawals, and provides a relevant,
representative indicator of risk due to the potential for a
company’s operations to be adversely affected by the limited
ability to withdraw water, either due to physical or legal
(rights) factors. Consumptive use is an important factor

where water is utilized in the operational activities of a
company, particularly as a critical component of cooling
computing centers. Water consumption, which measures the net
difference between water withdrawals and what is
discharged into the environment or to a third party, provides
investors with a more complete view of the water-
intensity of a company’s operations than water recycling.
Risks related to both water access and consumption are further
exacerbated by elevated water stress and/or scarcity.
Water access and use in such regions may result in a higher risk
of operational curtailment due to inadequate water
availability. Furthermore, water stressed regions may be more
exposed to increasing water prices over the medium to
long term.6 As such, the revised metric requires disclosure on
both water withdrawals and water consumption in areas
of High or Extremely High Baseline Water Stress.
While the revised metric incorporates water consumption, the
element of the provisional metric that captures the
volume of water recycled has been eliminated. Water recycling
is one strategy that companies can use to mitigate
6 Freyman, Monika, et al, “An Investor Handbook for Water
Risk Integration,” Ceres, March 2015, accessed June 6, 2018,
https://riacanada.ca/wp-content/uploads/2015/04/Ceres-

Investor-Water-Handbook.pdf.
INDUSTRY | 10
risks associated with water use, however, it’s not the only
strategy or always an applicable strategy. Other strategies
include efforts to use water more efficiently, to minimize water
losses, and to substitute water use with other inputs.7
The amount of water recycled in the provisional metric did not
provide a representative or complete picture of a
company’s efforts to manage performance on water use. Instead,
such risk is better characterized by water
consumption.
Finally, the revised metric is aligned with the GRI 303: Water
and CDP Water reporting frameworks, which was revised
prior to the 2018 reporting cycle.
Market Input
Investors: No direct feedback was received from investors
regarding the revision. However, investors generally
provided feedback in support of changes that would improve the
representativeness of the information generated by
the standard.

Companies: While this revision did not receive direct feedback
from companies in this industry, the change was
discussed as a high-level improvement by two large companies
in the technology sector.
Benefits
Improves alignment: The revised metrics more closely align
with the water frameworks and metrics promulgated by
the Carbon Disclosure Project (CDP) and Global Reporting
Initiative (GRI).
Improves the SASB Standard: The inclusion of data on water
consumption enables companies to more fairly represent
performance on the topic. The change also improves the
completeness of disclosure by giving a more informative,
holistic view of performance on water management.
7 The World Resources Institute, “Aqueduct water risk
framework,” working paper, January 2013, accessed June 6,
2018,
http://www.wri.org/sites/default/files/aqueduct_water_risk_fram
ework.pdf.

INDUSTRY | 11
Name: Data Privacy & Freedom of Expression
The SASB revised metric TC0102-05 from “Percentage of users
whose customer information is collected for secondary
purpose, percentage who have opted in,” to “Number of users
whose information is used for secondary purposes.”
includes a topic, Data Privacy & Freedom of Expression, which
addresses risks related to the use of personally identifiable
information (PII) for secondary purposes. The five
provisional metrics associated with the topic measure a
company’s use of the personal data of its users, along with the
company’s approach to policies and practices related to
behavioral advertising and customer privacy. The second part
of provisional metric TC0102-05, “Percentage of users whose
customer information is collected for secondary
purposes, percentage who have opted in,” seeks to measure the
users who have “opted in,” or who have indicated
permission for their personal data to be collected for secondary
purposes. Legal requirements generally establish

certain opt-in/opt-out policies that companies must adopt to use
customer data for secondary purposes. Therefore,
the component of the provisional metric, “percentage [of users]
who have opted in,” was highly unlikely to yield
distributive data, as virtually all customers should have either
actively opted in or would be classified as such per
definitions used in company policies. As a result, the metric
was revised to eliminate the component that measures the
portion of users that have opted in. This revision improves the
distribution of the data generated by the metric and
additionally enhances the cost-effectiveness of the metric.
Additionally, the SASB revised the unit of measure of the
metric from relative (percentage) to absolute (number) to
improve the usefulness of the information provided by the
metric. The absolute number of users whose information is
used for secondary purposes is more useful in assessing
magnitude of potential risk exposure associated with failure to
manage customer privacy. Additionally, the absolute number is
likely to be more useful in estimating financial costs
associated with managing or potential monetary losses as a
result of alleged or actual violation of customer privacy
laws or regulations. To assess relative performance of
companies in the industry, activity metrics and/or data reported
by companies in their financial filings would allow analysts to

normalize performance.
Supporting Analysis
Due to the regional differences in the regulatory environment
related to customer privacy, the definition of user
"consent," and therefore the opt-in policies, vary significantly.
In the E.U., such definitions are considerably stricter
and companies are unable to assume consent if it is not
explicitly obtained by users. For example, the E.U.’s General
Data Protection Regulation (GDPR) states that consent shall be
freely given, specific, informed, unambiguous, and
explicit.8 In the U.S., regulations regarding obtaining consent
from customers are less strict, often vary considerably
based on state regulations, and such requirements as those
established by GDPR are not generally required to be a
part of opt-in policies.9 Therefore, depending on the location of
the customer base, companies may have flexibility to
classify "customers who have opted in" in such a w ay that
allows them to use customer information for secondary
8 Regulation (EU) 2016/679 of the European Parliament and of
the council, European Union, April 27, 2016, accessed June 5,
2018,
https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32016R0679.
9 Martin A. Weiss and Kristin Archick, “U.S.-EU Data Privacy:

From Safe Harbor to Privacy Shield,” Congressional Research
Service, accessed
June 7, 2018, https://fas.org/sgp/crs/ misc/R44257.pdf.
INDUSTRY | 12
purposes. In fact, any disclosures that indicate the use of
customer data for secondary purposes absent customer
consent may be considered illogical from a legal perspective, at
least in regions where such data privacy regulations
exist. These factors suggest that disclosure on the “percentage
[of users] who have opted in” would virtually always
indicate that all users opted in, and thus, this information is not
distributive. Additionally, considering the regional
differences in regulatory frameworks covering customer consent
and opt-in/opt-out policies, investors would derive
more decision-useful information from discussion and analysis
of relevant policies and procedures adopted by
companies than from a quantitative measure of users who opted
in to the collection and use of their data. Such
information can be obtained from metric TC0102-04,
“Discussion of policies and practices relating to behavioral
advertising and customer privacy” included in the disclosure

topic, which ensures completeness and usefulness of
information provided to investors to assess companies’
performance on the disclosure topic.
Further, by revising the unit of measure for the first part of the
metric from “percentage of customers whose
information is used for secondary purposes” to the “number of
customers,” the usefulness of information is
enhanced by giving investors more flexibility in analyzing
performance on the disclosure topic. Specifically, the
absolute number of users whose information is used for
secondary purposes is likely to be more useful in estimating
financial costs associated with management of the issue or
monetary losses associated with potential failure to meet
relevant regulatory requirements. In other words, the absolute
unit of measure is more useful in assessing magnitude
of both chronic cost-related impacts and acute risks related to
customer privacy or data security.
Lastly, it may be noted that the SASB standards often gravitate
toward absolute measures, consistent with the revised
metric, for reasons such as:
for performance indicators, with investor
preference varying depending on use case; and

-specific activity metrics within
the standard to facilitate multiple means for
normalization of the sustainability accounting metrics included
in the standard based on investor preference.
However, relative measures may also be included when such
format is found more decision-useful by investors. As
discussed in the Market Input section, feedback from multiple
investors across various SASB sectors points to the
usefulness of both absolute and relative metrics.
Market Input
Investors: No direct feedback was received from investors
regarding this revision. However, investors provided
feedback that generally supports improvements to the
distributiveness of disclosures. With respect to the revision of
the unit of measure, broad feedback received throughout the
SASB standards’ development process in various sectors
suggests the usefulness of both absolute and normalized
measurements of performance.
Companies: Feedback was received on the provisional form of
the metric from multiple companies that indicated a
need for revision. While direct input on this specific revision
was not received, the revision indirectly addresses some of
the concerns companies shared related to the provisional metric.
More specifically, a large company in a different

industry indicated that the data generated by the provisional
metric may be considered competition sensitive
information. Another large company that provided feedback on
the provisional metric pointed out that the number of
account holders who “opt in” may provide inappropriate
representation of performance on the customer privacy
issue. The company stated that performance on this metric
would be indicative of consumer behavior rather than a
INDUSTRY | 13
reflection of business practices. The revisions to this metric, as
described above, are intended to alleviate company
concerns among other benefits.
Benefits
Improves the SASB Standard: The revision improves the
distributiveness of the metric, while enhancing cost-
effectiveness by eliminating a reporting requirement of the
metric. The revision of the unit of measure enhances
decision-usefulness of information generated by the metric.

INDUSTRY | 14
Name: Data Privacy & Freedom of Expression
The SASB revised provisional metric TC0102-07 from “Number
of government or law enforcement requests for
customer information, percentage resulting in disclosure” to
“(1) Number of law enforcement requests for user
information, (2) number of users whose information was
requested, (3) percentage resulting in disclosure.”
includes a topic, Data Privacy & Freedom of Expression, with
five associated metrics to describe a company’s management of
risks related to how it stores and protects customers’
sensitive data. Specifically, provisional metric TC0102-07 asks
companies to disclose governmental and law
enforcement requests for information. The revision of the metri c
to include the number of users whose information
was requested eliminates ambiguity in the information elicited
by the provisional metric and mirrors the way

companies currently report. The revised metric thus provides a
fair and more complete representation of performance
which results in a more decision-useful set of disclosures when
combined with the existing metrics related to the
topic.
Supporting Analysis
The provisional metric does not fairly represent company
performance with respect to Data Privacy & Freedom of
Expression, as it does not include the number of users whose
information a government or law enforcement entity
may have requested (e.g., one request could ask for information
for a single user, or for thousands of users). More
than 35 companies in the technology and communications sector
issue standalone transparency reports that break
out the information in this manner.
The transparency report of the industry’s largest U.S. listed
company (by market cap) illustrates both the number of
requests and the number of accounts affected.10 This
company’s total number of requests of approximately 26,000
was significantly different than the number of accounts or users
specified in these requests, which was approximately
45,000. Both numbers are needed to adequately understand the
magnitude of impact. This revision improves

alignment with current industry practice as well the
completeness of the set of disclosures related to Data Privacy &
Freedom of Expression.
Market Input
Investors: Investors were supportive of changes that improve
alignment with what companies currently disclose.
Companies: Company feedback on the revision was not
received.
10 “Law Enforcement Requests Report,” Microsoft, 2016,
accessed July 23, 2018, https://www.microsoft.com/en-
us/about/corporate-
responsibility/lerr/.
INDUSTRY | 15
Benefits
Improves the SASB Standard: The metric revision improves the
completeness of the set of metrics which define the
topic.

Improves alignment with existing reporting frameworks:
Companies currently report the information broken out by
number of requests and number of users whose information was
requested.
INDUSTRY | 16
Name: Data Security
The SASB revised provisional metric TC0102-09 from “Number
of data security breaches and percentage involving
customers’ personally identifiable information” to “(1) Number
of data breaches, (2) percentage involving personally
identifiable information (PII), (3) number of users affected.”
includes a topic, Data Security, with two associated metrics
that describe a company’s management of risks related to the
storage and protection of its users’ sensitive data. The
revision eliminates ambiguity regarding what data are being

asked for in the provisional metric by clarifying that the
number of unique data breaches shall be disclosed. Furthermore,
the revised metric provides additional useful
information by including the number of customers affected by
such data breaches. The revised metric is more aligned
with current corporate disclosures on the topic than the
provisional metric. Additionally, the technical protocol for the
provisional metric did not provide a definition for the term
“encryption,” and when discussing encrypted data
breaches, provided a narrow scope of disclosure that may
unintentionally exclude critical information, and result in
incomplete disclosures. To improve the completeness of
disclosures and alignment with existing terms defined by
regulatory agencies, the SASB revised the technical protocol to
incorporate the National Initiative for Cybersecurity
Careers and Studies (NICCS) definition of “data breach” and
“encryption,” and provided further reporting guidance
on the scope of disclosures involving encrypted data. This
revision improves alignment between the SASB Standard
and existing regulatory reporting definitions, as well as
increases clarity for companies preparing the data, ultimately
improving the cost-effectiveness of the standard.
Supporting Analysis

The technical protocol associated with the provisional metric
did not satisfy the measurability and completeness
attributes of a technical protocol, as it did not specify what was
intended to be measured by “number of data security
breaches,” which may include the number of unique instances of
breaches, or it may include the number of exposed
customer records. For example, if a company faced two cyber-
attacks during the reporting period, with one exposing
200,000 customer records, and another exposing 50,000
customer records, the provisional metric was unclear
whether the company would report this as “2” or “250,000.”
Evidence shows that both the number of incidents and
the number of records affected are useful data points to
understand the frequency and magnitude of data breaches.
Furthermore, an analysis of corporate disclosures demonstrates
that, broadly speaking, a structure of disclosure that
includes the number of incidents and the number of records
affected is a best practice for corporate disclosures. For
example, after their own major breaches, three large
companies11,12,13,14 each revealed, for the respective
incidents, the
11 Brad Arkin, “Important Customer Security Announcement,”
Adobe, October 3, 2013, accessed July 23, 2018,
https://blogs.adobe.com/conversations/2013/10/important-

customer-security-announcement.html.
12 Tanya Agrawal, David Henry, & Jim Finkle, “JPMorgan hack
exposed data of 83 million, among biggest breaches in history,”
Reuters,
October 2, 2014, accessed July 23, 2018,
https://www.reuters.com/article/us-jpmorgan-cybersecurity-
idUSKCN0HR23T20141003.
13 Cory Scott, “Protecting Our Members,” LinkedIn, May 18,
2016, accessed July 23, 2018,
https://blog.linkedin.com/2016/05/18/protecting-
our-members.
14 Keir Thomas, “Citigroup Hack Nabs Data from 210k,”
PCWorld, June 9, 2011, accessed July 23, 2018,
http://www.pcworld.com/article/229891/Citigroup_Hack_Nets_
Over_200k_in_Stolen_Customer_Details.html.
INDUSTRY | 17
number of accounts affected. In greater detail, one company’s
public disclosure after a data breach that came to light
in 2016 provides an illustrative example of the alignment of the
revision with current corporate disclosures on the
topic. In 2016, the company disclosed an unauthorized data
breach associated with more than 1 billion user accounts,
the largest known data breach to date. The firm’s disclosure
distinguished between unique incidents and number of

records compromised, consistent with the revised metric.15
Finally, the SASB revised the technical protocol of metric
TC0102-09 to define the terms “data breach” and
“encryption” using definitions identified by NICCS, which is
managed by the Cybersecurity Education and Awareness
Branch (CE&A) within the U.S. Department of Homeland
Security’s Office of Cybersecurity and Communications. The
NICCS is a part of the CE&A’s work to promote cybersecurity
awareness, training, and education for the Nation’s
cybersecurity professionals.16 The NICCS glossary of key
cybersecurity terms is informed by ongoing feedback from
end users and stakeholders, and is often cited by the U.S.
Securities Exchange Commission in documents such as the
Commission Statement and Guidance on Public Company
Cybersecurity Disclosures.17 The revision to align
cybersecurity terms with those of NICCS improves clarity by
referencing governmental sources, and will therefore likely
lead to more consistent and complete disclosures. Further, the
revision likely improves cost-effectiveness of reporting
for companies by increasing uniformity across different
reporting frameworks.
Additionally, when calculating the percentage of data breaches
in which account holders’ personally identifiable

information was breached, the technical protocol for the
provisional metric included guidance on the scope of
disclosure as it relates to incidents whereby encrypted data is
acquired with an encryption key. However, this language
failed to acknowledge instances through which weakly
encrypted data is acquired without an encryption key but can
still be converted to plaintext. Thus, the SASB revised the
technical protocol to provide additional reporting guidance
on the inclusion of incidents where there is reasonable belief
that acquired encrypted data could be readily converted
to plaintext. The revision results in more complete disclosures
by expanding the scope of disclosure to include
instances in which the attacker can recover the plaintext
information.
Market Input
Investors: Many investors across multiple industries and sectors
consistently communicated during SASB’s consultation
period that clarification of this metric was necessary, where
there was strong agreement with the revised metric.
Companies: Multiple companies voiced confusion over the
wording of the provisional metric and communicated that
it needed to be clarified in a manner similar to this revision.
Benefits

Improves the SASB Standard: The revision enhances the
standardization of the metric by improving the measurability
and the completeness of the technical protocol. The revision
also enhances cost-effectiveness by aligning the SASB
Standard with existing regulatory reporting terms.
15 Ibid.
16 “Cybersecurity Education and Awareness,” United States
Department of Homeland Security, last modified September
27,2017, accessed
May 6, 2018, https://www.dhs.gov/cyber-education-and-
awareness.
17 Commission Statement and Guidance on Public Company
Cybersecurity Disclosures, Securities and Exchange
Commission, issued on
February 20, 2018, https://www.sec.gov/rules/interp/2018/33-
10459.pdf.
INDUSTRY | 18
Improves decision-usefulness: The revision generates more
useful information, given that both the number of unique
cyber security data breaches and the number of customers
affected are important elements needed to better
understand corporate performance on the topic.

INDUSTRY | 19
Name: Data Security
The SASB revised provisional metric:
-10 Discussion of management approach to
identifying and addressing data security risks
to the following metric:
security risks, including use of third-party
cybersecurity standards
includes a topic for Data Security, and two associated metrics
which describe a company’s performance as it relates to
protecting customer data. Quantitative metric TC0102-09
asks for the number of data breaches, as well as the percentage
that contained customers’ personally identifiable

information18. Qualitative metric TC0102-10 asks companies to
discuss their strategy to identify and address data
security risks. Company approach to ensuring cyber
preparedness of its operations may include various strategies.
One
strategy, the use of third-party cybersecurity standards, can help
companies in the Software & IT Services industry
identify vulnerabilities in its information systems that may pose
a data security risk. Therefore, company disclosure on
its use of third-party cybersecurity risk management standards
and frameworks, of which use is rapidly growing,
would yield relevant and decision-useful information to
investors assessing performance on the Data Security topic.
The SASB evaluated the potential addition of a stand-alone
quantitative metric “Percentage of operations, by revenue,
independently certified to a suitable third-party cybersecurity
management standard” to measure companies’
approach to managing data security risks via aligning their
cybersecurity practices with external standards. This metric
was proposed in the 2017-18 public comment period. However,
additional research and stakeholder feedback
highlighted concerns that such metric may not be viable to
implement nor sufficiently representative of performance.
Based on the above, the SASB revised existing provisional

metric TC0102-10 to expand its scope by including a
description of company use of third-party cybersecurity
standards. The resulting metric is, “Description of approach to
identifying and addressing data security risks, including use of
third-party cybersecurity standards.” The revision
enhances completeness of the information requested by the
provisional metric, which will likely improve its decision-
usefulness.
Supporting Analysis
The SASB revised the provisional metric TC0102-10 to improve
its completeness and decision-usefulness. Specifically,
the revised metric asks companies to discuss how they identi fy
relevant cybersecurity standards to implement, the
extent of their implementation (i.e., operations, business unit,
geography, product, or information system), approach
18 Please see Revision TC-SI:05 for an update to provisional
metric TC0201-09.
INDUSTRY | 20
to third-party verification of the use of the standards, as well as
ongoing activities and initiatives related to increasing

the use of cybersecurity risk management standards.
The revision reverses the SASB’s earlier proposal in the 2017-
18 public comment period to include an additional
quantitative metric that would measure the percentage of
company’s operations independently certified to a suitable
third-party cybersecurity management standard. Additional
research and input from subject matter experts suggested
that the format of the proposed quantitative metric was not
viable and inadequate. The metric was found to neither
generate information representative of company performance on
managing the topic nor be decision-useful to
investors.
Specifically, the proposed metric required companies to
calculate the percentage as revenue generated from products
that are certified to a suitable third-party cybersecurity
management standard divided by the total revenue generated
from all products that are eligible for such certifications. Such
guidance was neither applicable nor feasible to follow
since products of companies in the Software & IT Services
industry are not generally covered by third-party
cybersecurity standards. Rather, cybersecurity risk management
standards address security of companies’ operations,
processes, and information systems. Further more, it should be

noted that the proposed quantitative metric relied on a
measure of "certifications," which is an inaccurate (or
oversimplified) characterization of the implementation of third-
party frameworks or standards concerning data security across
information technology systems. Therefore, the SASB
withdrew the initial proposal and instead incorporated the use of
third-party cybersecurity certifications by expanding
the scope of the existent qualitative provisional metric TC0102-
10.
The revision improves representativeness, completeness, and
usefulness of the provisional metric by requesting
discussion of companies’ use of third-party cybersecurity
standards as one of the strategies to manage data security
risk exposure. The technical protocol of the metric references
several cybersecurity standards that are commonly used
by companies in the industry, such as ISO 27000 series,
AICPA’s System and Organizational Controls (SOC), and
ISACA’s COBIT 5, which ensures alignment of the SASB
standard with existent corporate reporting. An example of a
company’s use of third-party standards includes a major
technology company’s use of ISO 27001 for its cloud
platform, which it refers to as “one of the most widely
recognized, internationally accepted independent security
standards.”19 This company constitutes 40 percent of the

market capitalization of the industry.
Market Input
Investors: Multiple investors agreed that this topic deserves
increased attention and that a focus on managemen t
systems is the best approach to ensure completeness of
information generated by the standard. Investors noted that
companies should have an externally verified cybersecurity
framework, and understanding how companies use third-
party cybersecurity standards to manage risk exposure of their
operations is crucial to being able to understand the
magnitude of the related risk.
Companies: Companies have communicated views on the
importance of this topic but did not provide input on the
quantitative metric that was proposed in the 2017-18 public
comment period. However, this revision is designed to
ensure the metric associated with the topic is pragmatic to
implement.
19 “Google Cloud Platform and the EU Data Protection
Directive,” Google, accessed July 20, 2017,
https://cloud.google.com/security/compliance/eu-data-
protection/.

INDUSTRY | 21
Others: The inclusion of a measure on the use of third-party
cybersecurity standards was suggested by and discussed
with multiple subject matter experts who believe it to be
representative of corporate data security performance. The
SASB received feedback that a quantitative measure of
performance through a percentage of revenue generated from
products that are certified to a suitable third-party cybersecurity
management standard is not appropriate due to the
calculation guidance being neither applicable nor feasible for
companies to follow.
Benefits
Improves the SASB Standard: This revision enhances
completeness of the information generated by the requested
discussion, which further improves decision-usefulness of
information regarding a company’s cybersecurity.
Improves alignment: By referencing third-party cybersecurity
risk management standards that are already being used
by leading companies in the industry, the revision ensures the
metric’s alignment and comparability of the information
it provides to investors.

INDUSTRY | 22
Name: Recruiting & Managing a Global, Diverse & Skilled
Workforce
The SASB revised the technical protocol for provisional metric
TC0102-13 “Percentage of gender and racial/ethnic
group representation for: (1) executives and (2) all others” to
“Percentage of gender and racial/ethnic group
representation for (1) management (2) technical staff and (3) all
other employees.” Further, the SASB updated the
reporting guidance to require gender breakdown globally but
racial/ethnic breakdown only in the United States per
the U.S. Equal Employment Opportunity Commission (EEOC)’s
EEO-1 Job Classification Guide categories. The technical
protocol was revised to specify that companies should describe
their policies for promoting inclusivity and fostering
equitable employee representation across their global
operations.
Adherence to Attributes of Technical Protocols
includes a topic, Recruiting & Managing a Global, Diverse &

Skilled Workforce, with associated metrics to describe a
company’s management of risks and opportunities associated
with hiring and retaining diverse candidates. The SASB
replaced the term “executives” with “management,” which is
defined in the technical protocol as both executive and non-
executive management, consistent with the original intent
of the metric. Further, the addition of the category for technical
staff improves alignment between the SASB
standards and current reporting practices and made the
standards more useful for investors. Provisional metric
TC0102-13 requires global disclosure of gender and
racial/ethnic breakdown according to the U.S. Equal
Employment
Opportunity Commission (EEOC)’s EEO-1 Job Classification
Guide.
This revision to the technical protocol of provisional metric
TC0102-13 recognizes that the U.S. EEOC racial/ethnic
classification can only be consistently applied to a company’s
U.S. workforce and may not be applicable to its global
workforce. In addition, the revised technical protocol includes a
discussion of company policies for promoting
inclusivity and fostering equitable employee representation
across global operations. While the technical protocol
specifies that companies may report racial/ethnic breakdown

outside of the U.S. by country or region, the SASB
clarified that the U.S. EEOC’s EEO-1 Job Classification Guide
shall be used for classifying employees only for a U.S.
workforce. For a non-U.S. workforce, companies shall use
occupational classifications systems adopted in countries
where the workforce is employed. For non-U.S. employees, the
registrant shall categorize the employees in a manner
generally consistent with the definitions provided above, though
in accordance with, and further facilitated by, any
applicable local regulations, guidance, or generally accepted
definitions. These revisions enhance the global
applicability of the technical guidance associated with the
metric to companies with a global workforce.
INDUSTRY | 23
Supporting Analysis
Companies with transparent hiring, promotion, and wage
practices to promote workforce diversity and inclusion can
benefit from improvements in productivity,20 revenues,21 and
market share22 over the medium to long term. Widely-
accepted diversity metrics, such as those required by the U.S.
EEOC, include the gender and racial/ethnic breakdown

of employees and managers.
Identifying diversity figures for technical employees gives
greater insight into the diversity of the highly paid and
sought-after group of workers tasked with creating a company’s
products. Further, this change ensures that company
diversity figures aren't skewed by the sometimes-different
ethnic makeup among different departments or teams. This
type of disclosure is already common practice in company
diversity reports.23,24,25,26
There are also several challenges related to reporting regional
racial/ethnic data. First, classification categories vary
significantly country-by-country and region-by-region;
therefore, it would not be practical or necessarily representative
of racial/ethnic diversity for companies to aggregate their
global number of employees by EEO-1 categories, which are
designed for U.S.-based reporting. Second, such data are
typically only available in some countries (e.g., Canada,
Brazil) due to privacy laws preventing disclosure. Finally, some
countries also look at age, disability, gender identity,
sexual orientation, or other aspects of diversity, which may be
defined differently by each country.
The revision to provisional metric TC0102-13 addresses these
concerns and brings the metric into alignment with

existing industry disclosure by requiring gender breakdown
globally but racial/ethnic breakdown per the EEO-1
categories only in the U.S. Companies shall describe their
policies for promoting inclusivity and preventing the
development of a globally homogenous workforce outside of the
U.S. that is not representative of the local
population. The technical protocol additionally allows
companies the opportunity to disclose racial/ethnic or other
breakdown by region or country-specific categories, if they
choose. This update recognizes that a perfectly
representative workforce would mirror population
demographics, but that regional demographics and ideal
racial/ethnic representation may vary widely by region. Thus,
the revision improves the usefulness of the metric and its
alignment with existing industry disclosures.
Market Input
Investors: Multiple investors across sectors consistently
communicated during SASB’s consultation period that while a
gender breakdown is relevant globally, a racial/ethnic group
breakdown by EEO-1 categories is feasible only in the
U.S.
20 A. Garnero, S. Kampelmann, and F. Rycx, “The
Heterogeneous Effects of Workforce Diversity on Productivity,

Wages, and Profits,” Centre
Pour La Recherche Economique et Ses Applications Document
de travail no 1304, September 2013, pp. 4-5, accessed June 5,
2018,
http://www.cepremap.fr/depot/docweb/docweb1304.pdf.
21 "Global Diversity and Inclusion: Fostering Innovation
Through a Diverse Workforce,” Forbes Insights, last modified
July 2011, accessed
June 5, 2018,
http://images.forbes.com/forbesinsights/StudyPDFs/Innovation_
Through_Diversity.pdf.
22 "Kelly Services: Diversity must help bottom line to be
sustainable," Crain's Detroit Business, last modified November
14, 2013, accessed
June 5, 2018,
http://www.crainsdetroit.com/article/20131103/NEWS/3110399
59/kelly-services-diversity-must-help-bottom-line-to-be-
sustainable.
23 “HP Global Diversity & Inclusion,”, HP, accessed May,
24th, 2018, http://www8.hp.com/us/en/hp-information/about-
hp/diversity/index.html.
24 “Diversity,” Google, accessed May 24th, 2018,
https://diversity.google/commitments/.
25 “Inclusion & Diversity,” Apple, accessed May 24th, 2018,
https://www.apple.com/diversity/.
26 “Facebook Diversity Update: Building a more diverse,
inclusive workforce,” Facebook, accessed May 24th, 2018,
https://fbnewsroomus.files.wordpress.com/2017/08/fb_diversity
_2017_final.pdf.

INDUSTRY | 24
Companies: Companies noted that they currently break out
technical employees and that SASB standards would be
more useful if they did the same. In addition, a limited number
of companies stated that the provisional metric was
U.S.-centric and would not result in meaningful information for
large, multinational companies that operate in
different countries.
Benefits
Improves the SASB Standard: This change improves cost-
effectiveness by limiting the required quantitative disclosure
on race/ethnicity to U.S. operations, which are measurable and
complete. It also improves decision-usefulness by only
requiring the aggregation of gender data, which is more likely
to be comparable across companies in different
industries and geographies.

INDUSTRY | 25
Name: Intellectual Property Protection & Competitive
Behavior
Summary of Change – Remove Metric
The SASB removed provisional metric TC0102-16 “Number of
patent litigation cases, number successful, and number
as patent holder.”
includes a topic, Intellectual Property Protection &
Competitive Behavior, with an associated metric to describe
how companies balance protection of their intellectual
property (IP) with ensuring fair use. Related to this, provisional
metric TC0102-16 asked companies to disclose the
number of patent litigation cases they were involved in, if they
were the patent holder in the case, and their
subsequent number of “successful” legal proceedings.
The number of cases a company is currently involved in is only
an approximate indicator of a company’s litigation
strategy. Provisional metric TC0102-16 did not fairly represent
company performance, nor is it likely to be useful for
investors. The removal of this metric increases the cost-

effectiveness of the standard.
Supporting Analysis
While IP protection is inherent to the business model of
companies in the Software & IT Services industry, companies’
IP practices can sometimes conflict with the best interests of
society. IP protection, on the one hand, is an important
driver of innovation; on the other hand, companies could use it
to restrict access to the benefits from innovation,
particularly if they are dominant market players. This metric
was meant to give analysts insight into how companies
were protecting their IP while respecting fair use.
Virtually all companies in the industry provide disclosures on
the topic, indicating its potential to significantly impact
companies. Generally, companies already disclose on major
patent litigation cases currently affecting them and a few
companies disclose the amount of fines or potential fines
resulting from the most significant cases, but there are no
companies who disclose information in the format of the
provisional metric in their financial filings.
It is unclear how an analyst would use the raw number of patent
litigation cases to compare one company’s
performance on protecting its intellectual property and
promoting fair use to another’s. The existence of patent trolls

also complicates this kind of ratio, as companies ultimately
don’t have power over having lawsuits, whether merited or
frivolous, brought against them.27 It is also unlikely to be an
accurate measure of performance on the topic as the
concept of defining a “successful” patent litigation is fraught.
For example, a company could “settle” a patent lawsuit
but admit no fault. A company could also have many frivolous
lawsuits brought against it and “win;” in this case it is
still unclear how this relates to performance on promoting fair
use. This could be the best outcome for the company
and its shareholders but would not be counted as “successful”
under the provisional metric framework. An issue as
complex as IP protection likely cannot be usefully captured by a
quantitative measure.
27 “Patent Trolls,” Electronic Frontier Foundation, accessed
June 13, 2018, https://www.eff.org/issues/resources-patent-
troll-victims.
INDUSTRY | 26
Market Input
Investors: SASB did not receive significant support from
investors on this metric.

Companies: A large company in another industry in this sector
provided a comment during SASB’s 2017-18 public
comment period noting that disclosure on provisional metric
TC0102-16 would reveal competitively sensitive
information, and that its peers likely feel similarly. SASB
received comments from a large company in another industry
with similar metrics stating that developing a useful
quantitative metric for the topic would likely not be possible.
Benefits
Improves cost-effectiveness: The removal of this metric reduces
the costs to companies of reporting on the SASB
Standard.
INDUSTRY | 27
Appendix A. Standards Board – Sector Committee
Assignments
STANDARDS BOARD MEMBER SECTOR CHAIR OTHER
COMMITTEES
Jeffrey Hales, PhD (Chair)

Professor, Georgia Institute of Technology – Ernest
Scheller Jr. College of Business
Financials, Renewable Resources &
Alternative Energy
Transportation, Services, Resource
Transformation
Verity Chegar (Vice Chair)
Vice President, BlackRock
Extractives & Minerals Processing
Financials, Technology &
Communications, Infrastructure
Robert B. Hirth Jr. (Vice Chair)
Senior Managing Director, Protiviti; Chairman
Emeritus, COSO
Technology & Communications
Health Care, Extractives & Minerals
Processing, Services
Daniel L. Goelzer, JD
Senior Counsel, Baker & McKenzie LLP
Services
Financials, Resource Transformation,
Infrastructure
Kurt Kuehn

Former CFO, United Parcel Service
Transportation, Infrastructure
Consumer Goods, Renewable
Resources & Alternative Energy
Lloyd Kurtz, CFA
Senior Portfolio Manager, Head of Social Impact
Investing, Wells Fargo Private Bank
Health Care, Resource Transformation
Technology & Communications, Food
& Beverage
Elizabeth Seeger
Head of Sustainable Investing, KKR
Consumer Goods
Health Care, Extractives & Minerals
Processing, Food & Beverage
Stephanie Tang, JD
Director of Legal, Corporate Securities, Stitch Fix
Food & Beverage
Transportation, Consumer Goods,
Renewable Resources & Alternative
Energy

INDUSTRY | 28
Appendix B. Redline Metric Tables
Redline tables are provided below for all sustainability
accounting metrics (Table 1) and activity metrics (Table 2). All
significant revisions to topics and metrics between the
provisional standard and the codified standard are shown in
redline; however, such redlines are not intended to communicate
the full scope of such revisions, for which readers
should refer to the codified Standard and accompanying content
elsewhere in the Basis for Conclusions.
All redlines presented in these tables are associated with a
revision number in the Revision Number column. Significant
revisions to the technical protocol associated with a given
metric will not necessarily be apparent in redline in the
tables; however, the associated revision number will be noted in
the Revision Number column of each table.
Any redlines that depict revisions to metrics but that are not
accompanied by a revision number (i.e., “n/a”) are not
addressed in the Basis for Conclusions as these revisions have
not altered the scope or content of metrics, such as
those that are intended to improve the consistency, clarity, and
accuracy of the standard. Similarly, if a metric is not
accompanied by a revision number, the technical protocol may
have been revised to improve the consistency, clarity,
and accuracy of the standard.

INDUSTRY | 29
Software & IT Services Industry
Table 1.
TOPIC ACCOUNTING METRIC CATEGORY
UNIT OF
MEASURE
PROVISIONAL
METRIC CODE
CODIFIED
METRIC
CODE28
REVISION
NUMBER
Environmental
Footprint of
Hardware
Infrastructure
(1) Total energy consumed, (2) percentage grid electricity,
(3) percentage renewable energy
Quantitative
Gigajoules (GJ),
Percentage (%)

TC0102-01 TC-SI-130a.1 TC-SI:01
(1) Total water withdrawn, (2) total water consumed,
percentage recycled, percentage of each in regions with
High or Extremely High Baseline Water Stress
Quantitative
Thousand
cCubic meters
(m3),
Percentage (%)
TC0102-02 TC-SI-130a.2 TC-SI:02
Discussionescription of the integration of environmental
considerations to strategic planning for data center needs
Discussion and
Analysis
n/a TC0102-03 TC-SI-130a.3 n/a
Data Privacy &
Freedom of
Expression
Discussion Description of policies and practices relating
behavioral advertising and user privacyto collection,
usage, and retention of customers’ information and
personally identifiable information
Discussion and
Analysis

n/a TC0102-04 TC-SI-220a.1 n/a
Percentage Number of users whose customer information
is collected for secondary purposes, percentage who have
opted-in
Quantitative
Percentage
(%)Number
TC0102-05 TC-SI-220a.2 TC-SI:03
Amount of legal and regulatory fines and settlementsTotal
amount of monetary losses as a result of legal
proceedings associated with customer user privacy
Quantitative
U.S. dollars
($)Reporting
currency
TC0102-06 TC-SI-220a.3 n/a
28 The Provisional Metric Code column provides the metric
code that appeared in the Provisional Standard. The Codified
Metric Code column provides the revised metric code that
appears in the
Codified Standard. The revised metric code is structured as
follows: [Sector Code]-[Industry Code]-[Topic Code].[Metric
Number].

INDUSTRY | 30
UNIT OF
MEASURE
PROVISIONAL
METRIC CODE
CODIFIED
METRIC
CODE28
REVISION
NUMBER
(1) Number of government or law enforcement requests
for customer user information, (2) number of users whose
information was requested, (3) percentage resulting in
disclosure
Quantitative
Number,
Percentage (%)
TC0102-07 TC-SI-220a.4 TC-SI:04
List of countries where core products or services are subject
to government-required monitoring, blocking, content
filtering, or censoring
Discussion and
Analysis
n/a TC0102-08 TC-SI-220a.5 n/a

Data Security (1) Number of data security breaches, and (2)
percentage
involving customers’ personally identifiable information
(PII), (3) number of users affected
Quantitative
Number,
Percentage (%)
TC0102-09 TC-SI-230a.1 TC-SI:05
Discussion Description of management approach to
identifying and addressing data security risks, including
use of third-party cybersecurity standards
Discussion and
Analysis
n/a TC0102-10 TC-SI-230a.2 TC-SI:06
Recruiting &
Managing a
Global, Diverse &
Skilled Workforce
Percentage of employees that are (1) foreign nationals
and (2) located offshore
Quantitative Percentage (%) TC0102-11 TC-SI-330a.1 n/a
Employee engagement as a percentage Quantitative Percentage
(%) TC0102-12 TC-SI-330a.2 n/a
Percentage of gender and racial/ethnic group
representation for: (1) executives management (2)
technical staff and (2) all other employeess

Quantitative Percentage (%) TC0102-13 TC-SI-330a.3 TC-SI:07
Intellectual
Property
Protection &
Competitive
Behavior
Number of patent litigation cases, number successful, and
number as patent holder
Quantitative Number TC0102-16 n/a TC-SI:08
Total amount of monetary losses as a result of legal
proceedings Amount of legal and regulatory fines and
settlements associated with anti-competitive
practicesregulations
Quantitative
U.S. dollars
($)Reporting
currency
TC0102-17 TC-SI-520a.1 n/a
INDUSTRY | 31
UNIT OF
MEASURE

PROVISIONAL
METRIC CODE
CODIFIED
METRIC
CODE28
REVISION
NUMBER
Managing
Systemic Risks
from Technology
Disruptions
Number of (1) performance issues and (2) service
disruptions; (3) total customer downtime
Quantitative Number, Days TC0102-14 TC-SI-550a.1 n/a
Discussion Description of business continuity risks related
to disruptions of operations
Discussion and
Analysis
n/a TC0102-15 TC-SI-550a.2 n/a
Table 2.
ACTIVITY METRIC CATEGORY UNIT OF MEASURE
PROVISIONAL
METRIC CODE
CODIFIED

METRIC
CODE29
REVISION
NUMBER
(1) Number of licenses or subscriptions, (2) percentage cloud-
based Quantitative Number, Percentage (%) TC0102-A TC-SI-
000.A n/a
(1) Data processing capacity, (2) percentage outsourced
Quantitative See note TC0102-B TC-SI-000.B n/a
(1) Petabytes Amount of data storage, (2) percentage
outsourced
Quantitative Petabytes, Percentage (%) TC0102-C TC-SI-000.C
n/a
29 The Provisional Metric Code column provides the metric
code that appeared in the Provisional Standard. The Codified
Metric Code column provides the revised metric code that
appears in the
Codified Standard. The revised metric code is structured as
follows: [Sector Code]-[Industry Code]-[Topic Code].[Metric
Number].

415.830.9220
[email protected]
sasb.org
TECHNOLOGY & COMMUNICATIONS SECTOR
SOFTWARE & IT SERVICES
Sustainability Accounting Standard
Sustainable Industry Classification System® (SICS®) TC-SI
Prepared by the
Sustainability Accounting Standards Board
October 2018
INDUSTRY STANDARD | VERSION 2018-10
© 2018 The SASB Foundation. All Rights Reserved. sasb.org
https://www.sasb.org/
SOFTWARE & IT SERVICES

Sustainability Accounting Standard
About SASB
The SASB Foundation was founded in 2011 as a not-for-profit,
independent standards-setting organization. The SASB
Foundation’s mission is to establish and maintain industry-
specific standards that assist companies in disclosing
financially
material, decision-useful sustainability information to investors.
The SASB Foundation operates in a governance structure
similar to the structure adopted by other internationally
recognized bodies that set standards for disclosure to investors,
including the Financial Accounting Standards Board
(FASB) and the International Accounting Standards Board
(IASB). This structure includes a board of directors (“the
Foundation Board”) and a standards-setting board (“the
Standards Board” or "the SASB"). The Standards Board
develops, issues, and maintains the SASB standards. The
Foundation Board oversees the strategy, finances and operations
of the entire organization, and appoints the members of the
Standards Board.
The Foundation Board is not involved in setting standards, but
is responsible for overseeing the Standards Board’s
compliance with the organization’s due process requirements.
As set out in the SASB Rules of Procedure, the SASB’s

standards-setting activities are transparent and follow careful
due process, including extensive consultation with
companies, investors, and relevant experts.
The SASB Foundation is funded by a range of sources,
including contributions from philanthropies, companies, and
individuals, as well as through the sale and licensing of
publications, educational materials, and other products. The
SASB
Foundation receives no government financing and is not
affiliated with any governmental body, the FASB, the IASB, or
any other financial accounting standards-setting body.
415.830.9220
[email protected]
sasb.org
The information, text, and graphics in this publication (the
“Content”) are owned by The SASB Foundation. All rights
reserved. The
Content may be used only for non-commercial, informational, or
scholarly use, provided that all copyright and other proprietary
notices
related to the Content are kept intact, and that no modifications

are made to the Content. The Content may not be otherwise
disseminated, distributed, republished, reproduced, or modified
without the prior written permission of The SASB Foundation.
To request
permission, please contact us at [email protected]
SUSTAINABILITY ACCOUNTING STANDARD | SOFTWARE
& IT SERVICES | 2
mailto:[email protected]
https://www.sasb.org/
mailto:[email protected]
Table of Contents
Introduction............................................................................
........................................................................................4
Purpose of SASB
Standards................................................................................
.........................................................4
Overview of SASB
Standards................................................................................
.......................................................4
Use of the
Standards................................................................................
...................................................................5
Industry
Description.............................................................................
........................................................................5
Sustainability Disclosure Topics & Accounting
Metrics...................................................................................

............6
Environmental Footprint of Hardware
Infrastructure..........................................................................
..........................8
Data Privacy & Freedom of
Expression..............................................................................
.........................................12
Data
Security..................................................................................
...........................................................................19
Recruiting & Managing a Global, Diverse & Skilled
Workforce...............................................................................
....23
Intellectual Property Protection & Competitive
Behavior.................................................................................
............28
Managing Systemic Risks from Technology
Disruptions.............................................................................
.................30
SUSTAINABILITY ACCOUNTING STANDARD | SOFTWARE
& IT SERVICES | 3
INTRODUCTION
Purpose of SASB Standards
The SASB’s use of the term “sustainability” refers to corporate
activities that maintain or enhance the ability of the

company to create value over the long term. Sustainability
accounting reflects the governance and management of a
company’s environmental and social impacts arising from
production of goods and services, as well as its governance and
management of the environmental and social capitals necessary
to create long-term value. The SASB also refers to
sustainability as “ESG” (environmental, social, and
governance), though traditional corporate governance issues
such as
board composition are not included within the scope of the
SASB’s standards-setting activities.
SASB standards are designed to identify a minimum set of
sustainability issues most likely to impact the operating
performance or financial condition of the typical company in an
industry, regardless of location. SASB standards are
designed to enable communications on corporate performance
on industry-level sustainability issues in a cost-effective
and decision-useful manner using existing disclosure and
reporting mechanisms.
Businesses can use the SASB standards to better identify,
manage, and communicate to investors sustainability
information that is financially material. Use of the standards
can benefit businesses by improving transparency, risk
management, and performance. SASB standards can help

investors by encouraging reporting that is comparable,
consistent, and financially material, thereby enabling investors
to make better investment and voting decisions.
Overview of SASB Standards
The SASB has developed a set of 77 industry-specific
sustainability accounting standards (“SASB standards” or
“industry
standards”), categorized pursuant to SASB’s Sustainable
Industry Classification System® (SICS®). Each SASB standard
describes the industry that is the subject of the standard,
including any assumptions about the predominant business
model and industry segments that are included. SASB standards
include:
1. Disclosure topics – A minimum set of industry-specific
disclosure topics reasonably likely to constitute material
information, and a brief description of how management or
mismanagement of each topic may affect value creation.
2. Accounting metrics – A set of quantitative and/or qualitative
accounting metrics intended to measure performance
on each topic.
3. Technical protocols – Each accounting metric is accompanied
by a technical protocol that provides guidance on
definitions, scope, implementation, compilation, and
presentation, all of which are intended to constitute suitable
criteria

for third-party assurance.
4. Activity metrics – A set of metrics that quantify the scale of
a company’s business and are intended for use in
conjunction with accounting metrics to normalize data and
facilitate comparison.
SUSTAINABILITY ACCOUNTING STANDARD |
SOFTWARE & IT SERVICES | 4
https://www.sasb.org/find-your-industry
Furthermore, the SASB Standards Application Guidance
establishes guidance applicable to the use of all industry
standards and is considered part of the standards. Unless
otherwise specified in the technical protocols contained in the
industry standards, the guidance in the SASB Standards
Application Guidance applies to the definitions, scope,
implementation, compilation, and presentation of the metrics in
the industry standards.
The SASB Conceptual Framework sets out the basic concepts,
principles, definitions, and objectives that guide the
Standards Board in its approach to setting standards for
sustainability accounting. The SASB Rules of Procedure is
focused
on the governance processes and practices for standards setting.

Use of the Standards
SASB standards are intended for use in communications to
investors regarding sustainability issues that are likely to
impact corporate ability to create value over the long term. Use
of SASB standards is voluntary. A company determines
which standard(s) is relevant to the company, which disclosure
topics are financially material to its business, and which
associated metrics to report, taking relevant legal requirements
into account1. In general, a company would use the SASB
standard specific to its primary industry as identified i n SICS®
. However, companies with substantial business in multiple
SICS® industries can consider reporting on these additional
SASB industry standards.
It is up to a company to determine the means by which it reports
SASB information to investors. One benefit of using
SASB standards may be achieving regulatory compliance in
some markets. Other investor communications using SASB
information could be sustainability reports, integrated reports,
websites, or annual reports to shareholders. There is no
guarantee that SASB standards address all financially material
sustainability risks or opportunities unique to a company’s
business model.
Industry Description
The Software & Information Technology (IT) Services industry
offers products and services globally to retail, business, and

government customers, and includes companies involved in the
development and sales of applications software,
infrastructure software, and middleware. The industry is
generally competitive, but with dominant players in some
segments. While relatively immature, the industry is
characterized by high-growth companies that place a heavy
emphasis
on innovation and depend on human and intellectual capital.
The industry also includes IT services companies delivering
specialized IT functions, such as consulting and outsourced
services. New industry business models include cloud
computing, software as a service, virtualization, machine-to-
machine communication, big data analysis, and machine
learning. Additionally, brand value is key for companies in the
industry to scale and achieve network effects, whereby
wide adoption of a particular software product leads to self-
perpetuating growth in sales.
1 Legal Note: SASB standards are not intended to, and indeed
cannot, replace any legal or regulatory requirements that may be
applicable to a reporting entity’s operations.
SUSTAINABILITY ACCOUNTING STANDARD |
SOFTWARE & IT SERVICES | 5
https://www.sasb.org/find-your-industry/
https://www.sasb.org/standards-setting-process/rules-of-
procedure/

https://www.sasb.org/standards-setting-process/conceptual-
framework/
https://www.sasb.org/standards-overview/download-current-
standards/
SUSTAINABILITY DISCLOSURE TOPICS & ACCOUNTING
METRICS
Table 1. Sustainability Disclosure Topics & Accounting Metrics
UNIT OF
MEASURE
CODE
Environmental
Footprint of
Hardware
Infrastructure
(1) Total energy consumed, (2) percentage grid
electricity, (3) percentage renewable
Quantitative
Gigajoules (GJ),
Percentage (%)
TC-SI-130a.1
(1) Total water withdrawn, (2) total water
consumed, percentage of each in regions with
High or Extremely High Baseline Water Stress
Quantitative

Thousand cubic
meters (m³),
Percentage (%)
TC-SI-130a.2
Discussion of the integration of environmental
considerations into strategic planning for data
center needs
Discussion and
Analysis
n/a TC-SI-130a.3
Data Privacy &
Freedom of
Expression
Description of policies and practices relating to
behavioral advertising and user privacy
Discussion and
Analysis
n/a TC-SI-220a.1
Number of users whose information is used
for secondary purposes
Quantitative Number TC-SI-220a.2
Total amount of monetary losses as a result of
legal proceedings associated with user privacy2
Quantitative

Reporting
currency
TC-SI-220a.3
(1) Number of law enforcement requests for
user information, (2) number of users whose
information was requested, (3) percentage
resulting in disclosure
Quantitative
Number,
Percentage (%)
TC-SI-220a.4
List of countries where core products or
services are subject to government-required
monitoring, blocking, content filtering, or
censoring3
Discussion and
Analysis
n/a TC-SI-220a.5
Data Security
(1) Number of data breaches, (2) percentage
involving personally identifiable information
(PII), (3) number of users affected4
Quantitative
Number,
Percentage (%)

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