By | June 28, 2022

GreenFin, a sustainability conference for the finance sector, is underway, and the topics at hand give institutional investors, private equity companies and others in the industry a lot to consider. Sustainability initiatives and ESG-related developments have big implications for these organizations, and on Day One, audience members gained valuable insights into how capital markets and ESG intersect. They also learned how to prepare for a landscape that features greater demands from regulators and higher consumer expectations around ESG performance. Reputation, risk mitigation and stewardship of the Earth’s resources—both material and human—are all on the table. And these topics have significant bearing on sustainability reporting, which explains the interest in The Climate Report of Tomorrow, one of the topics addressed during GreenFin’s Day One sessions.

The topic raises questions. What will regulators and investors look for in a global financial institution’s 2030 sustainability report? And what must financial institutions do before the close of the decade to ensure adequate progress toward Net Zero by 2050? Business leaders have been looking at these questions for a while, and now they’re also looking at the climate-related disclosure requirements that are emerging around the world.

Start With Defensible Data

Sustainability reports and disclosures start with data. And in light of the Securities & Exchange Commission’s (SEC’s) requirements for climate-related disclosures proposed in March this year, the largest publicly traded companies in the U.S. will also need auditable data from their supply chain partners.

The proposal for the Corporate Sustainability Reporting Directive (CSRD) was released in April 2021. The CSRD rules put forward in the newly announced provisional agreement between the Council of the European Union and the European Parliament will apply to some U.S.-based companies. Non-EU companies with an annual net turnover of €150M in the EU (and at least one subsidiary or branch in the EU) will be required to disclose information on their environmental impact, including their impact on climate change, water and marine resources, and biodiversity and ecosystems, among other things. Risk management and internal controls, as well as business conduct, will also be examined.

Reporting under the CSRD will need to be audited by an independent auditor or certifier, and non-EU companies will need to use a European auditor or an auditor based in a third country. Whether companies are preparing for the SEC disclosure requirements, the CSRD reporting requirements or another reporting framework, there’s no room for error. The data must be defensible, and it must provide insights and direction that enable corrective action. Companies aren’t just required to report their ESG performance; they need to improve upon it as well.

Acquire Reporting Tools and Capabilities for Tomorrow’s Sustainability Reporting Requirements

There’s an immediate need for robust environmental accounting solutions, and Sphera’s Corporate Sustainability software offers the comprehensive platform companies need. It equips large investors and PE companies with the capabilities and tools they need for defensible reporting in an era of increased scrutiny and growing regulatory demands. And it helps lay the foundation for activities that will enable companies to achieve their 2050 Net-Zero commitments.