PwC says corporates are moving forward with climate disclosures
More than 70% of business leaders in the U.S. are not waiting for the country's Securities and Exchange Commission (SEC) to finalise its new climate disclosure rules and will proceed with compliance regardless of when the new regime becomes U.S. law, according to a new survey shared with Net Zero Investor today.
Readiness varies across companies, and even business leaders that do say they feel prepared acknowledge there will likely be significant challenges to complying with the SEC’s proposed climate disclosure rules, including deadlines, resourcing, technology, and budget, PwC US and Workiva found.
Independent assurance will be a necessary component to meeting deadlines with investor-grade, transparent, and trustworthy data, the firms stressed.
Seventy percent of executives report their companies already seek voluntary, independent assurance, even if it is not required for reporting scope 1 and 2 greenhouse gas emissions.
Almost all leaders (96%) say they will proceed with assurance, regardless of whether it is included in the final SEC rules.
“Decisions in the capital markets are being made related to ESG, and it is our belief that market participants and other stakeholders are entitled to the same quality of information as they expect from financial related disclosures,” said Kevin O’Connell, Trust Solutions ESG Leader at PwC.
He continued: "Regardless of when the SEC rules are finalized, investors and stakeholders have made clear: this is important."
While 68% of executives reported that their company already uses technology for ESG reporting, 85% are concerned their company does not have the right technology in place to support the level of reporting required in the proposed rules, despite almost all anticipating it will play an important role in meeting potential new requirements.
Although 95% of business leaders said their company is prioritizing ESG reporting more now than before the rule was proposed, four in ten admitted their company isn’t fully prepared to meet the expected disclosure requirements.
That lack of preparation isn’t due to a lack of knowledge—leaders are acutely aware of the proposal and believe it sets clear expectations around what data and information needs to be disclosed; however, they expect to need more time once the rule goes into effect.
Many companies have already prioritized reporting and begun taking proactive measures, PwC said.
All executives shared that their company has taken at least one action in anticipation of the rule becoming law, with many taking more than one.
While these actions vary, the most common include: investments in ESG reporting technology (40%) and people (33%), and accelerating (35%), or establishing, if necessary (33%), climate ambitions or goal timelines.