What North America’s climate disclosure rules mean for your business
ESG commitments are quickly rising to the top of the agenda for companies across North America as the Securities and Exchange Commission (SEC) and the Canadian Federal Government draft ground-breaking new climate-related disclosure standards.
The new regulations have massive implications for all companies, whether within North America or not. The precedent and example set by the US and Canada will be hard to ignore and will encourage global regulators to follow suit.
What are the new rules?
The SEC’s new rules, if passed, would require certain US corporations to provide in-depth information about their climate-related risks, emissions, and net-zero transition strategies.
The new rules would require corporations to disclose risks from climate-related hazards (fire, floods, etc) and to disclose transition risks over the short, medium, and long term. These risks could be legislative, technological, market-based, or reputational.
The rules would also introduce detailed reporting requirements for Scope 1 and Scope 2 emissions as well as some Scope 3 disclosures. Learn about corporate emissions and footprinting
Lastly, companies would be required to report any existing targets related to emission reductions, energy use, nature conservation, or revenue from low-carbon products. The SEC would require that the net-zero transition plans, including precise details about the use of offsets or renewable energy credits, also be disclosed.
The Canadian Federal Government has announced mandatory climate-related reporting requirements for federally regulated banks and insurers, based on the Taskforce on Climate-related Financial Disclosures (TCFD) framework. Disclosure requirements for all publicly listed Canadian companies are also imminent, with the Canadian Securities Administrators proposing new rules in this area.
What this means for your business
The direction of travel is very clear. On the horizon in many of the world’s developed and emerging economies is paradigm-shifting legislation that will require businesses to make detailed climate-related disclosures. Learn about climate disclosures in the UK
Considering this, measuring and improving sustainability should be a focus for all businesses right now. While your company may not be required to disclose yet, getting a head start is vital for the future of both your business and our planet. Learn about the benefits of going green for your business
What to do next
We know that the changing ESG landscape can be overwhelming and confusing for many businesses. Limited understanding and time restraints so often lead companies to delay and dilute their sustainability efforts, or to do the bare minimum required to meet regulations and legislation.
With FutureTrack, businesses can overcome the challenges facing them and create meaningful, long-lasting, sustainable change. Used across the world to transform organisations, our platform makes sustainability simple, accessible, and intuitive, without sacrificing quality or impact.
Whether you’re looking to report and disclose your data or want to get a head start in the sustainability game, FutureTrack can help.
Book a demo with us to learn more.
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