Things to Consider
- Coordinate closely with trades to ensure their comments reflect concrete information about impracticability and cost; these make a difference in the admin record upon judicial review
- Trade associations and industry groups are taking the lead on advocacy.
- Opposition primarily has been limited to Republicans, likely limiting the ability to affect the proposal through political pressure.
Subject Matter and Staff Readiness
- Carefully inventory existing climate-, ESG-, and sustainability-related disclosures, statements, commitments, and repositories of knowledge relative to climate issues, emissions, and strategies; gap spot relative to the SEC proposal so you know where some of your talent and resources will need to be deployed
- Line up your A-Team of internal leaders and external advisers (auditors, ESG advisers, lawyers) to ensure you’re in the mix as the industry evolves its thinking on the hard stuff
- Recognize that the SEC proposal is just that – a proposal – and while the final rule will almost certainly differ from the proposed rule in important ways, expect a final rule to be at least directionally similar – be thinking deeply about how you would go about complying with the proposed version while remaining nimble around specific approaches that are subject to change
- Calculating and reporting on emissions is hard; developing and communicating business strategies that are adequately informed by climate risks, existing and future requirements, and energy transition issues is harder – identify and task a diversely multidisciplinary team to think and engage deeply and creatively on your company’s trajectory in a carbon-constrained world
- As part of elevated governance around ESG, immediately review the current timetable and direction of your 2022/23 voluntary ESG reporting; adjust it as appropriate or it will steam forward without regard for the consequences under the proposal
- Implement policies for commercial contracts that align with company ESG policies and procedures (1 and 2 as applicable), ensure contracts contain appropriate/relevant protections and risk allocation, review outstanding contracts, and consider revisions when appropriate.
- Ensuring governance and compliance policies and procedures are aligned and take into account the proposed rules for each stage of the process, coordinating with critical departments and team members.
- Maximize prevention by ensuring all public facing statements regarding climate, sustainability, the transition and other ESG matters are coordinated, consistent and align with the governance and compliance
- Advocacy may be limited by concerns of being “anti-transparency” or “anti-information sharing;” effective advocacy will need to balance concerns and communicate impacts of a complex and highly specialized issue.