Untested ESG Reporting Draws Scrutiny as SEC Readies Rules

Investors hungry for information about corporate climate risk and performance on social issues want some confidence that the data companies report are accurate and calculated consistently from year to year.

But so far that isn’t possible. Only half of big public companies hire a third party to review their sustainability disclosures, and almost none choose an accounting firm to provide that scrutiny. That may change soon.

The lack of outside review of the disclosures that investors increasingly rely on points to a yawning compliance gap as U.S. companies brace for new mandates to discuss these issues in their annual securities ...