NAVEX’s Karen Alonardo comments on the SEC’s plans to propose its climate change disclosure rules on 21 March:
“The industry has been waiting with bated breath for a proposed set of rules from the SEC on climate change. We anticipate they will address the growing need for decision-useful climate risk metrics that address key areas of ESG that companies have been addressing in disparate fashion with a patchwork of frameworks. While some standards bodies have focused on financially material ESG indicators, it has not been the de facto method. Now, with SEC guidance clearly forthcoming, this major capital market regulator has confirmed: ESG factors are financially material to investment decisions.
We anticipate that this giant step forward toward concrete rules will motivate businesses and investors toward specific environmental and societal goals and give much needed transparency and comparability into ESG metrics that matter. This will also address issues that arise from greenwashing with enforced greenhouse gas emissions reporting standards. The long-needed consolidation of the ESG disclosure frameworks will take a major step forward when SEC rules are formally affirmed as an integral part of the reporting requirements.”