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Social ImpactIn recent years, companies have increasingly recognized the importance of disclosing ESG (environmental, social, and governance) information in addition to their financial reports. As ESG awareness continues to grow, the SEC (Securities and Exchange Commission) is emphasizing the need for clear rules around climate and ESG disclosures.
According to SEC Chair Gary Gensler, companies should be disclosing five key items related to ESG: greenhouse gas emissions, management of climate-related risks, human capital management, political spending, and board diversity. Gensler has also proposed that companies disclose their plans to achieve net-zero carbon emissions by 2050.
"Companies need to provide investors with clear, consistent, and comparable information on how they are managing climate risks and opportunities," said Gensler in a recent speech. "Without such information, investors can't distinguish between companies leading the transition to a low-carbon future and those that are not."
The SEC is currently working on updating its 2010 guidance on climate-related disclosures, which will provide more specific information on what companies should be disclosing. The agency is also considering requiring public companies to report on their climate risks and greenhouse gas emissions.
Gensler's push for clearer rules on climate and ESG disclosures comes as companies face increased pressure from investors and customers to address sustainability concerns. "We're seeing a fundamental shift in the expectations of investors and the public, who are increasingly focused on climate and ESG issues," said Gensler.
As companies work to meet these expectations, they will need to ensure that their disclosures are accurate, transparent, and in compliance with any new regulations. "ESG disclosures are increasingly becoming an important component of financial reporting," said Gensler. "And as such, they need to be subject to the same level of scrutiny and oversight as financial disclosures."
Overall, the SEC's efforts to provide clear guidance on ESG disclosures could help companies navigate the complex landscape of sustainability reporting and ensure that their disclosures are meaningful to investors and stakeholders.
Over 90 public companies and 70 non-profit organizations use Socialsuite for tracking and reporting on their impact. With the help of our ESG software and expert team, businesses can easily get started on impact reporting, disclose faster, and save money compared to traditional methods. Whether you're new to impact reporting or looking to enhance your current practices, Socialsuite offers the tools and expertise needed to achieve your sustainability goals. Contact us to learn more about our solutions.
Whether it’s a public company, a private company, or a charity, Socialsuite has the right solution for you.