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Climate regulation is coming - whether companies are ready for it or not.
"In March 2022, the US Securities and Exchange Commission (SEC) proposed mandatory rules on disclosing climate-related information. The rules apply to all US public companies and disclosures are required to be integrated into regular financial filings.
The SEC rules are built on the well-established recommendations from the Taskforce for Climate-related Financial Disclosures (TCFD), but, in many areas, go much further."
Read more about the SEC rules here.
Great read from the folks at South Pole! And while developments associated with SEC rules related to climate regulation and disclosure are top of mind for many, this is not the only suite of regulations that companies need to keep an eye on.
As reported in the Wall Street Journal: "This year the International Sustainability Standards Board this year plans to complete two rule proposals that would cover companies’ disclosures of climate-related risks to their business and broaden the sustainability standard-setter organization’s focus to include corporate reporting on biodiversity and other topics. In 2023, the ISSB will also look into potential new disclosures around the impact of businesses on biodiversity, human capital, and reporting on human rights within companies."
And as reported in Bloomberg: "The European Financial Reporting Advisory Group has drawn up comprehensive reporting rules covering all aspects of environmental, social and governance issues, which will be mandatory for big European companies beginning in the 2024 financial year. The standards have been sent to the European Commission for approval and they are expected to be finalized around the middle of 2023, and will then be made mandatory in all EU countries. That means many companies will have to comply with the EU rules ahead of global rules that are being drawn up by the International Sustainability Standards Board, or ISSB, which will cover far fewer topics."
So, it is not just the SEC who is moving forward with standards and reporting requirements.
Understanding overlaps and complementarity between the various reporting requirements will be key for success moving forward.
The team at Greene Economics can help you make sense of the regulatory landscape and evaluate how these requirements will impact your operations.