ESG Disclosure Plans Emerge as Corporate Priority, Study Finds – Bloomberg Law

ESG Disclosure Plans Emerge as Corporate Priority, Study Finds  Bloomberg LawESG Disclosure Plans Emerge as Corporate Priority, Study Finds  Bloomberg LawESG Disclosure Plans Emerge as Corporate Priority, Study Finds  Bloomberg Law

A report found that half of companies have a strategy to report their environmental, social, and corporate governance performance to shareholders and regulators. A third of companies, 34%, have plans to implement ESG reporting strategies within the next one-to two years, according to a report by Thompson Hine LLP. The report was compiled after contacting 134 senior executives from publicly traded and privately owned companies. More than two-thirds of respondents were small or mid-sized companies with annual revenues between $50,000 and $500,000,000. The report was compiled by Thompson Hine LLP after querying 134 in-house counsels and senior executives at publicly traded and privately held companies. The Securities and Exchange Commission will soon introduce new disclosure requirements regarding climate change risks, diversity on boards and workforce diversity. Private companies, which have less stringent reporting requirements, have no plans to adopt an ESG Strategy. Regulators have been considering different standards for reporting ESG metrics. ESG strategies are defined by companies in different ways. However, they all agree that the main ESG components, such as workforce diversity and equity and inclusion, sustainability, and proper board governance measures, must be reported. Heidi Friedman, partner, co-chair of Thompson Hine’s ESG Collaborative group, and coauthor of this report, stated that disclosures on diversity, equity, and inclusion initiatives were a key focus for 95% and 63% of private businesses. Public companies ranked board oversight of sustainability and environmental issues as the second most important concern. Friedman stated that private companies ranked ethical business practices second in importance. They also face the possibility of ESG-related litigation from investors or state authorities. She stated that even private companies may not be subject to the same regulatory requirements for external disclosures. “This will also drive them to develop a plan.” The report stated that companies are concerned about future regulatory compliance and legal threats. Data collection and verification were the top ESG concerns for companies over the next 12 months, according to the report. Jurgita Ashley, co-author of the report and a partner in Thompson Hine’s ESG Collaborative, stated that good disclosures and protection from litigation threats are difficult without reliable data. Since years, many companies have been reporting ESG metrics to shareholders and the public. The survey revealed that some industries are more advanced than others in implementing ESG policies. Financial services, real estate, and the health care industry were the most early adopters of ESG policies. According to the study, more than a third (33%) of respondents in the tech and manufacturing industries said that they don’t have an ESG strategy but plan to do so in the next two-years.

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