Climate change and sustainability have become critical topics for investors, pushing companies to enhance their environmental, social, and governance (ESG) disclosures. A recent survey by NIRI: the National Investor Relations Institute and Persefoni reveals important trends in how companies are responding to this demand for climate information. Here are the key takeaways:
65% of surveyed companies have implemented controls and procedures to track, monitor, aggregate, and report on carbon emissions, climate risk, and other environmental metrics. This rises to 90% for mega/large-cap companies, highlighting a correlation between company size and climate disclosure readiness.
59% of companies voluntarily disclose climate-related information, with 95% of mega/large-cap companies doing so. This indicates that larger companies are leading the way in climate transparency.
Of those disclosing climate information, 91% report on Scope 1 and 2 emissions, while only 47% disclose Scope 3 emissions. This suggests that companies find it easier to measure and report direct emissions compared to those in their value chain.
61% of companies use sustainability or corporate social responsibility reports as their main platform for climate disclosures. This increases to 90% for mega/large-cap companies.
44% of companies obtain third-party assurance for their carbon emissions data, with environmental firms and specialty sustainability firms being the most common providers.
41% of respondents reported that the investor relations department has primary responsibility for climate matters, highlighting the growing importance of climate issues in shareholder communications.
77% of companies cited difficulty in obtaining Scope 3 data as their biggest challenge in meeting carbon accounting and emissions disclosure requirements.
41% of companies have already implemented or plan to implement technology solutions for carbon accounting and climate disclosure within the next 12 months, indicating a trend towards more sophisticated reporting tools.
36% of companies are deferring compliance-related actions until the final SEC climate disclosure rule is issued, suggesting some uncertainty in the regulatory landscape.
These findings underscore the growing importance of climate disclosure in investor relations and the challenges companies face in meeting these new demands. As regulations evolve and investor pressure increases, we can expect to see continued growth in climate reporting practices and technologies.
For IR professionals, this survey highlights the need to stay informed about climate disclosure trends, work closely with sustainability teams, and potentially invest in new technologies to meet the evolving expectations of investors and regulators.
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