The Securities and Exchange Commission (SEC) has adopted amendments to its rules under the Securities Act of 1933 and the Securities Exchange Act of 1934, mandating companies to furnish detailed climate-related information in their registration statements and annual reports. These amendments aim to furnish investors with critical information on climate-related risks that could materially impact a company's business operations, strategy, and financial condition.
The SEC's final rules mandate registrants to disclose the following climate-related information:
- Companies must disclose climate-related risks that materially impact or are likely to impact their business strategy, operations, or financial condition.
- There must be clear communication on the actual and potential material impacts of climate-related risks on the company's strategy, business model, and outlook.
- Companies are required to provide both quantitative and qualitative details on efforts and expenditures made to mitigate or adapt to material climate-related risks.
- The rules mandate disclosure of the board of directors' oversight of climate-related risks and the management's role in assessing and managing such risks.
- Companies need to describe their processes for identifying, assessing, and managing material climate-related risks.
- The company needs to disclose climate-related targets or goals, it must disclose any related material expenditures and impacts on financial estimates and assumptions.
- Large accelerated filers and accelerated filers are required to disclose material Scope 1 and Scope 2 emissions, with assurance reports provided at specified levels of assurance.
- Companies must disclose the financial impacts of severe weather and other natural conditions, including capitalized costs, expenditures, and losses, in a note to the financial statements.
- Disclosure Related to Carbon Offsets and RECs, If carbon offsets and renewable energy credits are a material component of a company's climate-related targets or goals, this must be disclosed.
- Companies must describe how their financial statement estimates and assumptions were impacted by risks and uncertainties associated with severe weather events, climate-related targets, or transition plans.
These rules are an extension of the SEC's longstanding commitment to evolving disclosure requirements in line with emerging economic realities and technological advancements. The final rules focus on providing investors with clear, decision-useful information on climate-related risks, directly within companies' SEC filings.
Updapt Views:
These mandated disclosures are aimed at enhancing transparency and providing investors with detailed and reliable information on how climate-related risks impact registrants, facilitating informed investment and voting decisions.
The Canadian Sustainability Standards Board (CSSB) has introduced its inaugural Canadian Sustainability Disclosure Standards (CSDS), marking an advancement in sustainability reporting within Canada. Aimed at setting a new benchmark for transparency in sustainability related disclosures, these proposed standards seek to enhance consistency and comparability in reporting practices.
Aligning with the International Sustainability Standards Board's (ISSB) foundational standards while proposing Canada-specific amendments, the CSSB's initiative underscores a commitment to sustainability as an integral component of economic operations. Open for public consultation, these standards are a call to action, inviting comprehensive feedback to refine and improve the sustainability disclosure framework, reflecting a broad spectrum of viewpoints and contributing to a more sustainable and resilient future.
In a strategic alignment with the global baseline established by the International Sustainability Standards Board (ISSB), the Canadian Sustainability Standards Board (CSSB) has proposed the Canadian Sustainability Disclosure Standards (CSDS) 1 and 2. These standards are designed to harmonize with the IFRS S1 and S2, incorporating Canadian-specific modifications to address local needs effectively. Alongside these proposals, a discussion paper is open for public comment, outlining the CSSB's approach to adapting the IFRS Sustainability Disclosure Standards for Canadian application.
Updapt Views:
The Canadian government's initiative to establish the Canadian Sustainability Disclosure Standards (CSDS) primarily enhances transparency and accountability in corporate sustainability practices. This move enables businesses to align their reporting with global benchmarks while incorporating Canadian-specific modifications, fostering greater comparability and consistency.
The European Council has successfully ratified a landmark legislative framework that obliges companies to address their adverse effects on human rights and the environment. This advancement follows a consensus to refine and adjust the scope of the new mandate and its timeframe for implementation. This strategic decision is set to bolster the Corporate Sustainability Due Diligence Directive (CSDDD), enhancing its viability.
This milestone concludes a multi-year endeavor to refine the regulation, initiated with comprehensive studies on directors' duties and sustainable corporate governance, alongside due diligence requirements across supply chains. These studies paved the way for the proposed CSDDD, delineating corporate responsibilities to mitigate and address negative impacts on societal and environmental well-being throughout their operations and in specific downstream activities.
Notable adjustments include a phased introduction of the legislation, ensuring a gradual compliance pathway for businesses, and the exclusion of certain activities from the legal framework. This revised directive aims to maintain the essential elements of the initial agreement while incorporating the necessary adjustments for broader acceptance and effectiveness.
The European Council's proactive approach in refining the CSDDD underscores a commitment to sustainable corporate practices. This legislative achievement marks a significant step forward in aligning corporate operations with environmental and human rights standards, demonstrating a balanced approach to regulatory development and corporate accountability.
Updapt Views:
Companies can integrate the new legislation by establishing comprehensive due diligence processes to assess and mitigate their environmental and human rights impacts. This involves conducting thorough supply chain audits, engaging in transparent reporting, and developing remediation strategies for identified issues. Adapting corporate policies to align with these obligations ensures responsible business operations and contributes to sustainable development goals.
Nigeria is on a path to a more sustainable future, asking all its businesses to adopt eco-friendly reporting by 2028. This move, led by the government, is about bringing the country's corporate activities in line with the broader goals of sustainability that the world is striving towards. It's a clear signal that Nigeria is serious about doing its part for the planet while continuing to grow economically.
The government's call to action is straightforward: businesses need to look closely at their environmental footprint and work towards being more transparent and sustainable. It's a push towards not just thinking about the here and now but considering the long-term health of our environment. This initiative is seen as a vital step in weaving environmental consciousness into Nigeria's economic fabric, encouraging new and innovative ways of operating that are kinder to our planet.
By setting these eco-friendly reporting standards, the Nigerian government is gently nudging the business community towards a more active role in achieving the country's environmental objectives. It's a strategy that hopes to make Nigeria an example of how sustainable practices can be integrated into the heart of business, aiming to build a stronger and greener economy for future generations.
Updapt Views:
The new rule from the Nigerian government that asks businesses to start eco-friendly reporting by 2028 is a big change. It means companies have to think through their current operational processes and how they can work towards being more sustainable. It is also a chance to lead the way in green practices. To navigate this transition successfully, businesses should consider early investments in sustainable technologies and employee training programs aimed at enhancing environmental awareness.
The Singaporean government has unveiled a Sustainability Reporting Grant to aid companies in covering up to 30% of the expenses associated with crafting their initial sustainability reports. This move aligns with the government's recent decision to mandate climate-related reporting for both listed and large non-listed companies, adhering to the standards set by the IFRS Foundation's International Sustainability Standards Board (ISSB). Disclosure for listed companies is set to commence in 2025, with large non-listed companies following in 2027.
During a presentation at the Ministry of Trade and Industry's Committee of Supply Debate, it was communicated that the forthcoming reporting obligations necessitate businesses to enhance their ability to monitor and disclose their carbon footprint. To facilitate this transition, substantial funding support will be provided, specifically targeting large enterprises to initiate their sustainability reporting endeavors.
As regulatory demands for climate and sustainability disclosures escalate worldwide, companies are encountering increasing costs to comply with non-financial disclosure requirements. Research indicates that corporate issuers spend an average of $533,000 annually on climate-related reporting. The Singaporean initiative aims to mitigate these financial burdens for companies, particularly large entities with annual revenues exceeding $100 million, by offering grants that cover a significant portion of the costs for producing their first sustainability report.
The government has committed to supporting small and medium-sized enterprises (SMEs) in developing their sustainability reporting capabilities. Although sustainability reporting is not compulsory for SMEs, the government plans to subsidize up to 70% of the costs for SMEs to engage with carbon service providers and prepare their inaugural sustainability reports, with additional support in the following two years. This comprehensive support framework underscores Singapore's commitment to advancing corporate sustainability and climate accountability.
Updapt Views:
Singapore's Sustainability Reporting Grant empowers companies to adopt sustainability practices by offsetting reporting costs, and enhancing their reputations as environmentally responsible entities. It encourages operational improvements and efficiency gains, leading to potential cost savings. Early adopters can navigate future regulatory landscapes more effectively.
