Environmental, social and governance (ESG) reporting is quickly moving from a voluntary corporate public relations tool to a regulated B2B communications prerequisite. To fully understand the drivers behind ESG planning and reporting, the Fuels Institute published a white paper that provides a history and outlook on ESG to help guide businesses.
Because ESG reporting is intended to provide business risk information (including climate change abatement approaches) to investors and boards, the Securities and Exchange Commission (SEC) recently proposed rules to govern ESG and provide some needed guidance. Even before this proposal, however, financial industry stakeholders were increasing their reliance on ESG principles when making investment and loan underwriting decisions.
Under the proposed rules, phased-in requirements will put new reporting requirements directly on publicly traded companies. In a surprise move, the SEC not only requires these companies to provide their direct CO2 emissions (Scope 1), but also includes the reporting of all indirect emissions (Scope 3). This will require associated companies (public and private) to report emissions to the publicly held SEC reporting company. As written, ESG requirements will touch every organization that is in the supply chain.
SEC requirements are likely to impact the industry as early as 2023. If the SEC rules are delayed, large publicly traded companies have indicated that they will move forward regardless.
Separately, ESG Integrity, a Fuels Institute program, and the National Association of Fleet Managers (NAFA) announced a partnership to assist the fuels and transportation industries with meeting the growing demand for ESG planning and reporting.
This partnership will provide guidance and significantly reduce costs for fleets while yielding final ESG reports with Scope 1, 2 and 3 emissions modeling and reporting. NAFA will closely collaborate with the ESG Integrity team to create a program to help educate and train fleet owners, operators and managers on how best to address their ESG requirements.
Download “The Case for Developing an ESG Plan” and learn more about ESG Integrity at www.fuelsinstitute.org/Environment-Social-Governance-ESG.