With the advent of CSRD reporting, a significant climate skills gap, and mounting reputational and legislative risks, 2024 looks set to be a challenging year for ESG and sustainability executives. While uncertainty persists – especially surrounding the SEC’s yet-to-be-finalized climate rule – not everything needs to remain a mystery. Here are the answers to three of the most pressing questions currently facing corporate sustainability decision-makers:
- “Apart from the EU, are any other jurisdictions looking to introduce legislation similar to the CSRD?”
Yes – in fact, the three largest stock exchanges in China have already released a mandatory sustainability disclosure regulation that echoes the CSRD. This will require large listed firms to disclose sustainability data starting in 2026 – including Scope 3 emissions – and will incorporate the double materiality approach. We have also seen guidance from EFRAG that interoperability between the CSRD and the IFRS Sustainability Standards will increase. - “How can I engage employees throughout my organization in sustainable strategy?”
This was a hot topic during panels and presentations at the Verdantix Climate Summit North America. Climate and sustainability leaders note that engagement takes time, but that a vital first step is mapping key stakeholders. Subsequently, sustainability teams should then build relationships with these stakeholders as soon as possible, while using terminology that is familiar to employees in other departments. To go beyond this, firms can offer external training to further educate employees on sustainability topics, as we’ve seen from organizations like HSBC and Starbucks. - “What kind of informationdoes my firm need to be gathering on its suppliers? What tools are available to help collect these data?”
Alongside certifications and emissions, organizations now require more information from suppliers about the origin of products and their associated raw materials. With increasing scrutiny on social issues, firms should also consider asking for DEI data and policies to evaluate human rights within the supply chain. To get an accurate picture of climate-related risks, ESG teams should collect risk metrics to track exposure to climate change. Gathering all this information across the supply chain is a significant challenge, but there are an increasing number of software offerings that can help strengthen communication and engagement with suppliers. For more information on the solutions available to ease supply chain data collection, read Smart Innovators: Supply Chain Sustainability Software.
