With heightened interest surrounding environmental, social and governance (ESG) activities including SEC rulemaking on ESG disclosure requirements, companies will want to evaluate the disclosures they have in place and prepare for any associated responsibilities.
Fenwick's David Bell and Ron Llewellyn alongside Edua Dickerson, VP of ESG and Finance Strategy with ServiceNow, discussed the release of SEC ESG disclosure requirements and other regulatory developments, the importance of establishing disclosure controls, board oversight, stakeholder expectations plus 2021 disclosure trends and best practices for 2022.
Key takeaways included:
When establishing an ESG reporting program, it is important to have strong management and board oversight structure and support, and the participation of a cross-functional group of executives and employees within an organization.
Companies should determine the ESG issues that are most material and then should establish appropriate disclosure controls to ensure accurate reporting of their most relevant ESG metrics.
Proposed regulations such as recent SEC rules in the areas of cybersecurity and climate risk may accelerate the pace and expand the scope of ESG reporting which may be burdensome for many companies.
Third-party standards and frameworks will continue to shape expectations regarding ESG disclosures so companies should consider them when providing voluntary ESG disclosures.
Companies should engage with their investors and other key stakeholders to understand the ESG information they consider to be most valuable and develop their ESG reporting strategy accordingly.