SEC Moves Toward Mandatory Climate Reporting: Are You Prepared?

Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

Doug Henschen is former Vice President and Principal Analyst where he focused on data-driven decision making. Henschen’s Data-to-Decisions research examines how organizations employ data analysis to reimagine their business models and gain a deeper understanding of their customers. Henschen's research acknowledges the fact that innovative applications of data analysis requires a multi-disciplinary approach starting with information and orchestration technologies, continuing through business intelligence, data-visualization, and analytics, and moving into NoSQL and big-data analysis, third-party data enrichment, and decision-management technologies. Insight-driven business models are of interest to the entire C-suite, but most particularly chief executive officers, chief digital officers,…...

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Draft rules from the SEC will require public firms to report carbon emissions and climate risks. Software vendors are gearing up to help you comply.

Thousands of public companies are already reporting carbon emissions and climate risks as part of their environmental, social and governance initiatives. But what was once voluntary may soon be mandatory. Is your organization ready to follow the leaders?

The mandate is coming from the U.S. Securities and Exchange Commission (SEC), which on March 21 issued draft regulations that will require public companies to report their carbon-emissions and climate-risks. The rules are not final, but the SEC already gathered industry feedback in 2021 before coming up with the draft rules. From here there will be a 60-day public review period. The SEC is expected to issue final rules by the end of 2022, with a three-year phase-in period that would start in 2023.

So are you ready to report, let alone plan and strategize around emissions and climate-risk data? If your company is among the more than 2,600 companies that has embraced the voluntary framework put forth by the Task Force on Climate-Related Financial Disclosure (TCFD), you are in luck. Based on last year’s industry feedback, the SEC has modeled its disclosure requirements in large part on the TCFD disclosure framework, as well as the also-popular Sustainability Accounting Standards Board (SASB) industry standards and materiality guidance.

As noted in the video report posted above, some aspects of the SEC’s draft rules are likely to face legal challenges, particularly Scope 3 (indirect) emissions reporting and guidance on what is material to a company’s financial performance. But Scope 1 and Scope 2 (direct) emissions and climate-risk disclosures are likely to be instituted as soon as next year. You can also expect global requirements, as the IFRS Foundation, which guides financial reporting in more than 140 countries, is expected to introduce its own draft emissions disclosure requirements this year.

Industry leaders, fast followers, and even cautious adopters are already reporting this data. In fact, 92% of Fortune 500 companies already disclose data tied to climate issue and publish environmental reports. The problem is that they do so using a variety of voluntary formats.

The good news in regulation is that it will provide uniform requirements that will simplify reporting for business. The mandate will also ensure complete and consistent measures that will help investors and the public spot greenwashing and selective disclosures.

Technology will be crucial to not just meeting reporting requirements, but to harnessing data for strategic and operational planning and business differentiation. The vendors that have been ahead of the curve with ESG-supporting software – companies including Cervest, Envizi, Honeywell, Insight Software, Planetly, Watershed, and Workiva – will retain first-mover advantages, as they know how to gather and report data based on the leading voluntary frameworks. They know where customers are likely to struggle when it comes to compiling data and, in some cases, moving the needle on ESG goals. They will be in a good position to guide companies preparing to meet the SEC’s coming reporting requirements.

In some ways, however, new requirements level the playing field for vendors and end-users that haven't spent years working on climate and social reporting. In recent weeks I’ve had briefings and updates with several vendors that are clearly gearing up to support ESG initiatives, including Anaplan, C3.ai, Onestream, Salesforce, and SAP.

The bottom line in the SEC’s draft regulations is that it’s time to prepare – if you haven’t already – for an era in which climate-impact and climate-risk reporting will be mandatory for public companies. From my perspective, it’s best to take a proactive approach and use technology to turn requirements to your own advantage.

Reclaiming Marketing’s Mojo: Lessons from Adobe Summit 2022

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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I’m about to say the quiet stuff out loud: “Modern marketing” has meant marketers accepting that sometimes, we couldn’t get “there” from “here.” We have had to sacrifice our mojo in the name of modernization—sacrifice that secret sauce that turns wildly creative moments into monetization.

For those open to hearing it, an interesting thread emerged during this year’s Adobe Summit (summit.adobe.com): Marketing is actively reclaiming its mojo. And make no mistake, integration is at the center of getting our groove back.

In Adam Grant’s main stage session discussing organizational psychology and the dynamics of a team, he explained that when you get a “room of smart people together,” instead of coming together to make the room smarter, individuals spent time proving they were THE SMARTEST of the smart. To quote Grant, “often, the whole was less than the sum of its parts.” He went on to share that failed… anything…wasn’t because of a lack of smart people thinking smart things. Rather, failure was the byproduct of not RE-thinking fast enough.

This resonated with me as a marketer…profoundly. I’ve BEEN IN that smart room watching the smartness wars demolish the best strategies and best intentions. But I’ve also understood that we marketers were forced to rethink everything in the earliest days of the global COVID-19 pandemic. We needed to quickly see the writing on the walls that something massive, disruptive and devastating could be on the way. We started to run…and being the smartest in the room didn’t matter as much as being able to be the most connected and most aligned across the organization.

Smart was nice. But smart didn’t save opportunities, recovery or growth. Smart was a bonus. Integrated was a requirement. Integrations, from teams to technologies helped us survive…and it will be integrations that will help marketing to continue to thrive and disrupt the status quo.

If there is anything that Adobe Summit 2022 showed us is that integration is the path forward for marketing. Be it integration between systems, channels, data and applications or integration across teams, people and partners, the biggest opportunities will realized and optimized thanks to collaboration, connection and integration.

Integration has taken center stage. Don’t believe me? Let’s break down three of the big Summit announcements that immediately caught my eye:

• New unified workflows between Adobe Workfront, Adobe Creative Cloud Enterprise, and Adobe Experience Manager integrate teams along the pathways of how the work of engagement gets done. This isn’t just integrating the work of approvals or collaboration, but fundamentally integrating along the continuum of storytelling and how that work forms the cornerstone of durable, profitable customer relationships.
• Data integrations align the speed of the customer with the speed of personalization as Adobe Real-Time CDP and Adobe Target come together. It is one thing to aggregate and normalize data, it is another to fully integrate fundamentally different intentnions behind data sets to craft a more holistic view of the intersection between customer, opportunity and brands. By bringing Adobe Target and Real-Time CDP together, the intentions of growth via precise delivery meets the opportunity of growth via precise personalization and contextual content.
• Integration took center stage again through key partnership announcements including commerce-centric partnerships with Walmart, FedEx and PayPal to expand a customer’s control of their buying, paying and delivery journey. Yet another partnership integration, with IBM’s The Weather Channel business, integrates a new layer of contextual intelligence bringing weather, climate and environmental contextualization to personalization.

Each announcement focused on the integration to facilitate and accelerate the work being done. Each focused on expanding the ecosystem of work to embrace the customer by ingesting the behavioral and contextual signals most directly impacting how their consumption of engagements could be shifted thanks to a more personal approach.

(Side note: There were a TON of announcements from enhancements and expansions of Adobe Sensei, Adobe’s AI, to the introduction of Adobe Experience Cloud for Healthcare and Adobe’s new cloud-based digital learning platform, Adobe Learning Manager. Check out this Adobe news announcement for a round up: https://news.adobe.com/news/news-details/2022/Adobe-Summit-2022-Make-the-Digital-Economy-Personal/default.aspx)

That isn’t to say there wasn’t plenty of that future-forward aspirational dreaming Adobe Summit is known for. This year, it wasn’t just announcements of cross-cloud integration demonstrating that connection between Creative, Experience and Document clouds…it was hearing from Scott Belsky, the Chief Product Officer and EVP of Creative Cloud sharing Adobe’s vision of the metaverse.

Shared immersive experiences visualized in a 3-D world will be core to the metaverse economy. The vision outlined at Summit revolved around bringing the metaverse to life with Adobe Substance 3D Modeler (now in beta) that aims to bring the capacity to create AND collaborate on 3D assets out of the specialized (and complex) world of design and into the immersive, collaborative, real-time workstyle of the metaverse ready enterprise. Engagement across metaverses will not wait for brands to get up to speed with 3D, let alone the economies, commerce and experiences. Customers ready to co-create and collaborate in these shared worlds will simply move on.

I typically call Adobe Summit the annual celebration of marketing…but I’ve rethought (thanks Adam) that position and instead will leave you with this: Adobe Summit 2022 was a celebration of the work and the integrations that accelerate and empower how experiences translate into revenue. Thankfully, that work is marketing’s work. And what gets done is growth in an economy based on the power of getting personal…and THAT is marketing’s mojo. Time to go reclaim it!