In July, our team joined leaders from around the country for The Society of Corporate Governance national conference in Maryland. Corporate governance professionals, general counsels, law firms, senior executives, and board members came together to discuss best practices, regulatory developments, and emerging trends in corporate governance. Sustainability was a central theme, and panels included topics like ESG reporting and climate risk management.
Below, we share our top takeaways from the event.
5 Key Takeaways: What We Learned About Corporate Governance and Sustainability
1. All environmental claims must be substantiated–not just those in regulated reports.
Consumers, investors, and regulators are increasingly wary of greenwashing, and you must be able to back up your sustainability claims with data. This is true regardless of any regulatory delays — climate disclosure is inevitable. Third-party verification of climate reporting is rapidly becoming a norm, and companies must be sure that their ESG reports, websites, and other public materials are accurate and consistent. A best practice is to prioritize measurable information and validate projects at their outset, not after they are underway.
2. Climate creates opportunity, not just risk.
Meeting climate disclosure requirements is important, but it’s not the only reason to set sustainability targets. A good climate transition plan can create value. Many of the sustainability teams that spoke at the conference said they were moving from an orientation of risk management to one of opportunity. Organizations that can share a narrative about how environmental responsibility is part of their business strategy will create context for stakeholders and increase buy-in. This is also important for pre-IPO companies — building sustainability capacity now is key to presenting a comprehensive skills matrix when they go public.
3. Understanding your data and audience is critical.
To build an effective sustainability strategy, you need an in-depth understanding of your carbon footprint. What are your top emission sources and low-hanging fruit for decarbonization? How is your value chain contributing? There’s a substantial opportunity to advance your climate goals by leveraging AI and detailed data. Carbon accounting software can give you both a big-picture overview of trends as well as a granular breakdown of emissions by category and source. The more transparent and traceable this data is, the more prepared you’ll be for assurance — something regulators increasingly require.
You also need a solid grasp of your stakeholders’ interests. For example, corporate secretaries should get to know their active shareholders, find out about their sustainability concerns, and ensure that disclosures address them.
4. Climate reporting teams should leverage the company’s existing financial accounting processes.
You likely already have processes for governance and internal control over financial reporting, and you can apply these to your sustainability information. Finance staff who have already prepared financial reports for the SEC or other jurisdictions will be crucial here — they know how to manage data and prepare it for auditing.
5. Cross-functional collaboration is essential. Together, chart out how to succeed in climate management and reporting.
To meet stakeholder demands for reliable information, teams need to work together. As you prepare for disclosure, you can begin by charting all of the regulations your company will have to comply with. Next, conduct a gap analysis of what regulators require and what is already being reported in the public domain. Finally, pull together a multidisciplinary team to determine how to manage this information: Decide what technology you need and whether you will work with third-party auditors and consultants. It’s especially important for sustainability leaders to consult with their legal and finance departments.
Building Value with Accurate, Transparent Carbon Data
Many of the conversations at the conference revolved around the same theme: Businesses need reliable climate data. Transparent calculations not only enable you to meet regulatory requirements with confidence — they also lay the foundation for climate strategies that effectively mitigate risk and build value. Technology and AI can be powerful tools on this front. Learn more about how carbon accounting software can help you prepare for climate disclosure.
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