A fascinating study released by PwC and Workiva shows that the proposed SEC regulations on climate disclosures are already having an impact. The study finds that businesses are acting proactively to comply, before regulations go live.
Reporting on a survey of 300 U.S. public companies, the study finds that:
- 98% of U.S. public companies are already preparing climate disclosure reports
- 80% expect that the cost of first-year compliance will exceed $500,000
- 70% have not taken steps to improve data quality
- 40% lack adequate staff for the new reporting requirements
- 70% rely on third-party assurance reporting to improve data quality and reliability
The findings are a perfect description of a fast-growing new market: Intense demand; early steps forward; a shortage of expertise; and reliance on third-party standards to define first steps.
The study also reports that only 21% of those surveyed have reviewed supply chain emissions reporting. While this area could see delayed implementation by the SEC, most public companies must also report in the EU, where supply chain emissions reporting is required.
With 40 to 60% of S&P 500 revenues coming from outside the US, it is likely that the EU reporting requirements are binding on many U.S. public companies, further weakening the impact of the SEC delays in finalizing its proposed regulations.
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