For many years, companies that established a public net zero greenhouse gas (GHG) emissions target were viewed as having advanced ESG strategies that set them apart from competitors. However, a net zero target is no longer viewed as adequate.
The U.S. Securities and Exchange Commission’s (SEC) climate disclosure regulation is a monumental shift from companies voluntarily developing a sustainability strategy to requiring registrants to provide annual data as an indicator of their ESG performance. Additionally, companies will be required to provide complete and valid documentation to back up their climate commitments. Whether a company is already disclosing GHG emissions and climate strategy or has yet to start, the proposed SEC legislation and the upcoming International Sustainability Standards Board (ISSB) standards provide compelling incentive for companies to proactively inventory their practices, manage risks, and capture opportunities.
The SEC draft rules emerged from more than a decade of rising demand from investors, the recommendations of an ESG Advisory Subcommittee, and a year-long public comment period. The proposed new SEC legislation incorporates frameworks on climate risk and GHG emissions from the Taskforce on Climate-related Financial Disclosures (TCFD) and the Greenhouse Gas Protocol. It seeks to provide stakeholders with consistent and reliable information on the potential impacts that climate-related risks may have on business to inform investment decisions.
With promulgation of the SEC rules and issuance of the ISSB standards anticipated at the end of this year, 2023 will bring a significant shift in how companies track and report on climate resiliency and GHG emissions. Companies can take several approaches, depending on where they are and where they aim to be along the ESG maturity spectrum. While the SEC rules are only applicable to certain publicly traded companies, companies outside of the SEC’s jurisdiction will be affected, given interrelated supply chain connections and general business advancement goals in the private sector.
We encourage companies to use Tetra Tech’s GHG Emissions Milestones of ESG Maturity and Climate Risk and Resiliency Milestones of ESG Maturity (see full article) to reflect on your company’s current sustainability practices and to inform your unique strategy and action plan. Increasing the sustainability practices within your organization can be an iterative process. No matter where you fall along the continuum, you can make frequent process improvements and take bold action to mature beyond regulatory requirements to improve business outcomes.
Whether the SEC’s proposed rule directly or indirectly affects your company, Tetra Tech can be an asset to your team as you work on what’s next for your company’s ESG progression. From strategy development to engineering and implementation solutions, Tetra Tech is Leading with Science® to help our clients reach their sustainability and ESG goals.
We cover approaches to prepare to comply with climate disclosure requirements—and move beyond compliance to create a competitive advantage—in our paper, “How Upcoming ESG Guidelines and Requirements for Climate-Related Disclosures Can Enhance a Company’s Sustainability Position.”
Explore how companies can comply with regulations while enhancing their sustainability position through climate-related disclosure.
About the authors
Jennifer Warfield, PE
Jennifer Warfield is a program manager for environmental commercial accounts specializing in ESG and sustainability services.
With more than 20 years of experience in environmental, health, safety, and sustainability consulting, Jennifer specializes in interdisciplinary solutions for corporate global teams, to create synergy and efficiency toward high-quality outcomes. She focuses on portfolio and management techniques for greater climate resiliency.
Jennifer has expertise in a range of ESG-related projects, including strategy, policy statements, reporting and disclosures, and GHG inventory, as well as stakeholder engagement and materiality assessment projects. She has managed global organizational transformation initiatives for clients, resulting in culture shift and process improvements. She has expertise in global environmental compliance and audit program management, as well as environmental and ESG due diligence associated with mergers, acquisitions, and divestitures.
Jennifer has a Bachelor of Science in Civil Engineering from Rice University and a Master of Science in Environmental Engineering from University of Texas at Austin.
Mary Beggs
Mary Beggs is a senior associate, agriculture and economic growth, in Tetra Tech’s International Development Services group.
She brings more than 15 years of experience supporting the private sector in more than 20 countries in Africa, Eastern Europe, and Southeast Asia on the U.S. Agency for International Development, United Kingdom Agency for International Development, Millennium Challenge Corporation, International Finance Corporation, the World Bank, and other private sector-funded initiatives.
She is an expert in applying an ESG lens to market systems analysis in emerging economies, with emphasis on local partner engagement and empowerment. Mary currently manages support to the Presidentially appointed Board for International Food and Agricultural Development (BIFAD), where she is working with BIFAD and USAID on numerous activities, including those related to climate change mitigation and adaptation.
She has a Master of Business Administration from Brandeis University and is trained in Lean Six Sigma process improvement.