Many unprepared for SEC ESG reporting requirements

Key takeaways

• While there is concern among CFOs regarding declining sales and uncertainty around economic and financial market volatility over the next six months, most are not yet thinking about recession in a meaningful way.
• The labor market remains a top-of-mind focus, particularly in relation to the rapid pace of wage gains, which is expected to play a role in keeping inflation above the Fed’s target this year.
• Although many companies have not focused on retention in recent years, a notable number of CFOs said they have started to proactively award midyear or one-off merit increases, which have largely been effective in retaining valued employees.
• Many CFOs remain concerned and frustrated about the amount of time and effort the SEC’s proposed ESG compliance and reporting rules will require, and it appears that most companies are not fully prepared, operationally or in terms of human resources, for the massive amounts of disclosure.
• Nationwide and across industries, companies appreciate that the SEC extended the comment period by a month, but most plan to sign on to trade or industry group responses, rather than submit individual letters.
• As companies work to gain clarity on the new climate-related requirements, many are looking into relevant “no-regrets” moves around increasing education, compiling greenhouse gas inventories, etc. in preparation for Scope 1-3 reporting.