US Companies Say They’ll Be Ready for Green Reporting Rules

US executives sound confident that their firms will be ready to apply new European rules requiring companies to report on their climate impact, even as they wait for final requirements from Wall Street’s top regulator.

A majority of corporate leaders PwC LLP surveyed, 69%, said that they were prepared for pending disclosure rules. Half said they saw climate change as a risk to their businesses, according to the survey that earlier this month captured the views of about 600 C-suite executives, including CEOs, tax directors and human resource officers.

Although two-thirds of the surveyed executives said theywere watching the Securities and Exchange Commission’s efforts to finalize climate disclosure rules as soon as October, corporate managers are focusing more on European requirements that take effect next year for large, listed corporations.

“Companies are moving forward with implementation of the now mandatory requirements in Europe and that adds to the optimism that they can get it done,” said Wes Bricker, vice chair of PwC’s tax and assurance practice, known as trust solutions. “They’ve looked at the requirements and they understand what the mandate is.”

Under the EU rules, companies will have to report a broad range of sustainability issues, including water resources and climate, as well as the financial risks they face. In the US, the SEC has drafted rules targeting climate that would require companies to report greenhouse gas emissions, climate risks and any financial toll.

Companies still are grappling with the investments they need to reliably track and disclose those metrics, including staff training and building out governance processes and controls, Bricker said.

Demand for staff to support corporate climate work is “at an all-time high,” said Neil Dhar, vice chair and co-leader of PwC’s consulting practice. Executives’ positive outlook doesn’t extend, however, to operational challenges their companies face, and they are uneasy about developing new product lines or setting emissions targets, Dhar said.

Less than a quarter of business leaders have planned for climate-related business disruptions in the coming year, the survey found, despite epic wildfires in Hawaii and Canada and historic heatwaves in the Southwest.

Among other survey findings:

• Leaders said they were more optimistic that the US would avoid a recession in the next six months. Just 17% of those surveyed predicted an imminent economic downturn, a sizable drop from 35% a year ago.
• Nearly half of the executives said their companies would invest in generative AI over the next year to 18 months. They worry about getting workers to buy into the tools, overcoming fears that the efficiencies gained from the emerging tech could eliminate their jobs.
• After a string of layoffs, more than half of companies are also looking to invest in their current workforces with higher pay, technology training and better perks like mental health benefits.
• More than 60% are engaging with policymakers around privacy issues and are also closely watching how lawmakers and regulators respond to generative AI.