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Companies prepare for ESG climate reporting standards (2024)
| Environmental, social, and corporate governance |
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| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
The SEC has paused enforcement of its rule requiring corporate climate disclosures, but companies are still preparing to comply with ESG standards, especially from the European Union:
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The pause on the U.S. Securities and Exchange Commission’s (SEC) climate disclosure rule has injected a dose of uncertainty into the world of environmental, social, and governance (ESG) reporting. However, this development should not be misconstrued as a sign of a slowdown in the global movement toward standardized ESG transparency. Regardless of the pause on the SEC ruling, organizations are still being impacted by global regulation, with July marking the official halfway point of the first year of reporting under the Corporate Sustainability Reporting Directive (CSRD), and many are continuing to actively prepare for compliance. The CSRD was finalized by the EU in December 2022 and is widely considered the most comprehensive ESG regulation ever, bringing together financial data, ESG information, and assurance for the first time. And they aren’t the only country doing so, the U.K., New Zealand, Japan, China, Brazil, South Korea, Hong Kong, and the European Union (EU) have all proposed or passed similar regulations.[1] |
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Some companies are already starting to report ESG data in response to uncertainty over when regulations will become enforceable, according to a recent Fortune piece:
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[E]ven with uncertainty over when government-mandated climate disclosures will be issued and what they will look like, experts say companies are still moving forward by measuring their environmental, social, and governance (ESG) risks and opportunities. And many businesses are already proactively tracking that data and sharing it publicly in anticipation of the rules changing. 'The timeline for what companies will have to report and where they’ll report is somewhat in question,' said Kristina Wyatt, deputy general counsel and chief sustainability officer at climate data disclosure software company Persefoni. … The level of frustration about the regulatory paralysis is 'not as significant as you might think,' she added. By and large, companies know that they will need to share more ESG disclosures in the near future and many are even relieved that the fractured regulatory landscape is becoming more harmonized.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
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