PLANET | CLIMATE DISCLOSURE
Ensure consistency and prevent greenwashing An increasing number of organisations are making net zero commitments and providing reporting to share information about emissions and their pathway and milestones to transition – a disclosure of metrics relating to company climate journeys that is currently voluntary .
But now regulators , investors and other stakeholders are increasingly asking for comparability , consistency and enhanced quality in ESG reporting , explains Wes , and SEC rulemaking is a step in that process . “ This is an important step to prevent greenwashing and to make sure everyone has access to the same quality of information ,” he says , adding that the timing of the proposal is reflective of what investors are expecting from businesses .
“ Historically , the SEC steps in to enact measures when there ’ s a significant need for the disclosure of information relevant to investors ’ decisions . Many companies have made net zero commitments and have been voluntarily disclosing their climate journey . But investors , as well as consumers and other stakeholders , are not only expecting companies to report this , but the overall market is pushing companies to disclose it in a standardised way that allows for comparability .
“ Accurate and standardised reporting also provides investors and other market participants with more consistency . As well , standardised reporting creates accountability for companies in regard to their progress in meeting their ESG goals and protecting the business from climate-related risks .”
Wes explains the proposal is a muchawaited step by the SEC to respond to investors ’ expectations to have better , more reliable information to make decisions . “ It ’ s a necessary step to provide investor-grade , decision-useful information that can inform the decisions that underpin the functioning of the capital markets ,” he says .
66 March 2023