Now, more than ever, stakeholders and investors are considering Environmental, Social, and Governance (ESG), with a notable interest in climate-related issues, when making investment decisions. But how are they comparing one company’s sustainability to others?

Currently, the U.S. Securities and Exchange Commission (SEC) does not provide specific guidelines or rules regarding how these efforts should be quantified and reported. The lack of a uniform method of tracking makes it difficult for companies to properly disclose the information and challenging for investors to effectively evaluate climate-related risk.

According to SEC Chairman Gary Gensler, “Investors are looking for consistent, comparable, and decision-useful disclosures so they can put their money in companies that fit their needs.”

The SEC is responding to this need by forming a task force to focus on ESG issues. This group will be responsible for developing a proposal by the end of this year for the Commissioner’s consideration of a mandatory disclosure rule.

WHY DO INVESTORS AND STAKEHOLDERS VALUE ESG?

Investors and stakeholders realize that implementing ESG initiatives helps to create stronger companies, which in turn minimizes risk and leads to more attractive investment opportunities.

FURTHER INFORMATION

Establishing and organizing baseline information, tracking consumption of energy, water, and waste, and implementing a program to validate these metrics enables organizations to more accurately report efforts to stakeholders and can help in preparing for new rules that may be set forth by the SEC. Contact Cornerstone to learn how we can assist your business with sustainability services and solutions.

Click here to explore the SEC response, including the opportunity to provide and read public comments regarding this issue.