TEMPE, AZ: AUGUST 16, 2023 – A new report unveiled today finds that many public companies responding to a recent survey are taking meaningful steps to address increasing requests/demands for climate risk-related data, as well as associated expectations for sound governance structures and processes that support this risk.
The collaborative report from Persefoni and the Society for Corporate Governance: The State of Climate Disclosure & Governance 2023, delivers key insights from a May 2023 survey of Society members, representing 90 public companies, on the transformative journey that organizations are navigating as they grapple with a rapidly unfolding landscape of climate and environmental regulation and disclosures.
"These findings illustrate how US-listed companies are today making significant commitments to understand their climate risk ahead of any climate disclosure regulations requiring them to do so,” said Mike Wallace, Chief Decarbonization Officer of Persefoni. “Mandatory disclosure rules around the globe, which are expected to ultimately include SEC climate disclosure requirements in the US, will further shape companies’ governance structures and processes and standards of reporting.”
“Society members, who are extensively involved in their company’s disclosure and governance processes, are keenly sensitive to the dynamic regulatory environment and the changing needs and priorities of their investors. The survey supports the fact that companies are evolving their practices in response to increasing concerns about climate change risk and the potential implications of climate change on the business,” said Randi Val Morrison, Senior Vice President and General Counsel at the Society for Corporate Governance.
Key Findings include:
- Proactive Climate Tracking: Approximately 90% of respondents revealed that their companies have established controls and procedures to track, monitor, aggregate, and report climate and environmental metrics where applicable.
- Voluntary Disclosure Commonplace: Nearly 90% of respondents voluntarily disclose climate and environmental goals, metrics, and other relevant information. Prominent areas of disclosure include Scope 1 and 2 GHG emissions (73%), followed by other environmental metrics (e.g., energy, water, and waste-related goals or targets) (36%), Scope 3 emissions (26%), and net zero/carbon neutral goals (23%).
- Communication Channels: The sustainability/CSR report was the most common platform for voluntary climate data disclosure (96%), followed by the company website (59%), CDP questionnaires (52%), and TCFD reports (42%). Notably, only 15% reported climate data disclosure in the annual report and 14% in Form 10-K.
- Third-Party Assurance: About 30% of respondents said that their company does not receive third-party assurance of climate-related metrics (25% large-cap | 44% mid-cap), and 7% said they were unsure (6% large-cap | 13% mid-cap).
- Board Oversight: The board nominating/governance committee assumed primary oversight responsibility for climate and other environmental issues in 63% of cases, while 26% reported full board oversight.
- Governance Documents: Board or board committee oversight is chiefly documented in committee charters (88%), proxy disclosures (61%), and ESG/sustainability reports (59%).
- Meeting Agendas: Climate-related topics were distributed across different frequencies on the meeting agenda for the full board or board committee/s. Meanwhile, environmental-related topics, excluding climate, trended towards ad hoc or on an as-needed basis.
- Organizational Responsibility: Approximately 49% of respondents identified their company’s standalone sustainability function/department as having primary responsibility for climate and environmental matters; however, responses varied widely by company size.
The complete The State of Climate Disclosure & Governance 2023 report is available for download on Persefoni’s and the Society’s websites.
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About Persefoni:
Persefoni AI Inc. provides businesses, financial institutions, and governmental agencies the software fabric for managing their organization’s climate-related data, disclosures, and performance with the same level of rigor and confidence as their financial reporting systems. The company’s software enables users to simplify the calculation of their carbon footprint, identify decarbonization strategies and perform climate trajectory modeling aligned to temperature rise scenarios set forth by the Paris Agreement, and benchmark their impact by region, sector, and/or peer groups.
For more information about Persefoni, please visit https://persefoni.com/.
For Media Inquiries:
Anna Maldonado
About Society for Corporate Governance:
Founded in 1946, the Society is a professional membership association of approximately 3,700 corporate secretaries, in-house counsel, outside counsel, and other governance professionals who serve approximately 1,000 public companies of almost every size and industry.
For more information, visit www.societycorpgov.org.
