Back in June, I wrote that ESG tracking is a trending issue. ESG continues to gain momentum, as the U.S. House of Representatives recently passed a Resolution 1187 calling on businesses to be more transparent in their climate risk reporting. While this has yet to become law, the movement inside the financial industry is to have more information on the climate risk faced by companies. In fact, the Securities and Exchange Commission is planning to release a draft regulation on climate disclosures later this year. What remains to be seen is if the SEC will require “Scope 3” GHG emissions data (emissions from the use of a company’s product in the larger economy) or how well companies are progressing towards GHG reduction goals. Whichever route the federal government takes, now is the time to start preparing for this new reporting requirement.
Compiling and reporting this data will be a significant undertaking. The necessary data to fulfill these reporting requirements are not conveniently located in one file folder on someone’s desktop computer. The data will reside in field operations, corporate departments, and perhaps even international subsidiaries. So, one of the most significant challenges will be the internal coordination of data collection. The next major challenge will be in how the GHG impacts are calculated. There may not be a single source of calculation methodologies that may be difficult to replicate. As the Fidelity’s and Blackrock’s of the world start reviewing these climate risk disclosures, the reported data must be able to withstand their scrutiny. With all these challenges, how does a company proceed?
Your first step should be to sign up for the ANB Systems webinar on August 25, 2021. We will be discussing how to prepare for future ESG reporting requirements. While ANB is not an ESG consulting firm that will help you formulate your ESG strategies, ANB has over a decade of experience tracking sensitive data for natural gas and electric utilities. Their new product, esgTRACK, combines the power of their two premier products, eTRACK+, and eTRM, to provide you a platform to not only track and report but also calculate GHG impacts. With the ESG world rapidly evolving, sign up to learn more about esgTRACK.
Written by – Michael Stockard
Michael Stockard is an independent consultant at Stockard Energy Advising and is a member of the Advisory Panel at ANB Systems. Michael has over 40 years of experience in the design and implementation of demand-side management programs.