After months of silence, the SEC has announced that the final vote on its Climate Change Disclosure rule will take place no later than October 31st 2023. Taking into account the minimum 60-day gap between publication in the Federal Register and enactment, the rule could come into effect as early as January 1st 2024. If the SEC follows this timeline, listed US firms would need to file their climate disclosures for fiscal year 2024. With potentially as little as 180 days to prepare, organizations regulated by the SEC need to take three key steps:
Step one: Assemble an internal project team covering sustainability, finance, risk and legal. The net zero programme governance toolkit provides useful recommendations for more mature firms to do so. Those at an earlier stage may simply task the head of compliance with leading a dedicated project.
Step two: Organizations will realize that their internal expertise and bandwidth are not up to the task. At this stage, affected firms should seek outside advice from a proven climate change consulting provider. Vendors to consider include AECOM, Arcadis and WSP – all of which feature in the Leaders' Quadrant of the Verdantix Green Quadrant on climate change consulting.
Step three: Automate carbon footprint calculations and digitize workflows for climate disclosures with the help of digital solutions. With so many vendors in the market – from big players like ServiceNow to recent arrivals like Sweep – firms must develop a clear idea of their requirements and goals before selecting a provider. One element of this is developing a five year digital strategy, to ensure that any partnership is futureproof.
Even if the rule does not come into effect until FY 2025, complex international organizations still need to get cracking with their preparations. It is vital to remember that climate disclosures are not just a compliance requirement – voluntary reporting can give firms a significant competitive advantage in the market.
