SASB Taxonomy

Greenwashing is the practice of making false or misleading claims about the environmental benefits or sustainability of a product, service, or company. This can include exaggerating or fabricating a product's eco-friendliness, hiding its negative environmental impacts, or making unsubstantiated claims about its sustainability.

Hypothetical beverage company called "FreshDrink Co." Financial materiality (impact on the company): Climate change is causing water scarcity in regions where FreshDrink Co. sources its water. This scarcity could lead to increased water costs and potential supply disruptions, directly affecting the company's financial performance and long-term viability. Environmental and social materiality (impact of the company): FreshDrink Co.'s water usage in water-stressed areas may deplete local water resources, affecting the surrounding ecosystems and communities' access to clean water.

Social impact in the context of double materiality refers to how a company’s operations affect people and communities. This includes direct and indirect consequences of business activities on employees, consumers, local communities, and society at large.

Governance impact in the context of double materiality focuses on how a company’s governance structures influence both its financial performance and its broader societal impact. This approach requires organizations to evaluate both how governance practices affect their bottom line and how they impact stakeholders such as employees, shareholders, and the community.

Double materiality suggests that companies should assess the impact of external environmental and social factors on their operations (external materiality) and evaluate the impact of their activities on the external environment and society (internal materiality).

The responsible allocation, management, and oversight of capital to create long-term value for clients and beneficiaries, leading to sustainable benefits for the economy, the environment, and society