PLANET | CLIMATE DISCLOSURE
And while the final adoption of the new ruling may not happen until 2024 , Wes urges business leaders to “ pay attention and make preparations now to properly anticipate and prepare for the rule requirements ”.
Challenges for business Wes explains that like other compliancerelated measures , the proposal does require additional resources , costs , investments and time , which may present a burden especially for smaller businesses that are public companies .
“ Businesses are at different points in their ESG journey making it easier for some to comply with the proposal , whereas for others , significant investments will be necessary ,” he says .
To meet these new requirements , many businesses will likely need to transition to investor-grade and tech-enabled reporting , to “ dramatically accelerate their climate change reporting processes , while implementing effective governance and internal controls ”. In a comment letter to the SEC , PwC proposed that the effective date of any final rules should be phased and should also consider the time needed to develop and implement related systems , processes , and controls . “ A phased approach would allow businesses to have additional time to review the final rule ’ s impact , potentially reducing the cost and burden of implementation ,” explains Wes . Ramifications for the leadership team For senior leaders , the SEC ’ s climate disclosure rule carries various ramifications but perhaps the most important , according to Wes , is how compliance with the proposed rule will play an important part in telling a company ’ s overall financial picture to investors , government regulators , and other critical stakeholders .
“ Senior leadership will need to continually consider how its climate-related risks position a company across both the short and long term . With these disclosures no longer being voluntary , senior leadership also must be mindful of how climate-related risks offer a new way for investors to compare companies across the same industry .”
Ultimately the role of complying with SEC ’ s ruling will lie with the CFOs and their role leading a company ’ s overall finance operations . The climate-related disclosures will filter into a company ’ s overall filings which squarely sits as the responsibility of the CFO .
Additionally , part of a CFOs role will be explaining how these climate-related risks translate to a company ’ s overall financial
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