In an effort to salvage our planet for generations to come, climate-protection measures are intensifying around the world. Most recently, the Security and Exchange Commission (SEC) has launched the process to update its climate disclosure requirements. Companies will have to find tools and strategies to swiftly adapt.
Let’s start at the beginning. Greenhouse gas (GHG) emissions are the leading contributors to climate change, and all hands are needed on deck to reduce them exponentially. One of the solutions being proposed is an enhancement of climate reporting efforts. Several frameworks already exist to provide guidelines for GHG inventories: the TCFD, the GRI, and the GHG Protocol, to name a few. They require companies to identify climate-related risks, describe management’s role in mitigating them, and disclose scope 1 and scope 2 emissions. This year, the climate reporting train is picking up steam in the form of the SEC’s proposed rule on The Enhancement and Standardization of Climate-Related Disclosures for Investors. And it’s headed across America, ushering in a new era for publicly-traded companies.