Executive Summary

This best practices report examines emerging regulations and standards for corporate disclosure of greenhouse gas (GHG) emissions and climate risks. The report details European Union (EU) regulations tied to the EU’s Corporate Sustainability Reporting Directive (CSRD). These regulations apply to large EU organizations beginning in 2024 and will extend to midsize EU-based firms and non-European companies by 2028. The report also details new sustainability reporting standards published in 2023 and now being promoted globally by the International Financial Reporting Standards (IFRS) Foundation, which guides financial reporting in more than 140 countries. Finally, the report previews final GHG emission and climate risk reporting mandates expected from the U.S. Securities and Exchange Commission (SEC) as well as two state laws enacted in 2023 by the State of California. The SEC and California regulations are expected to apply to large organizations as of 2026 and to extend to midsize firms in subsequent years. 

After detailing emerging regulations and standards, this report provides constructive, proactive recommendations that boards; C-suite leaders; and sustainability, accounting, audit, finance, investor relations, legal, and risk teams should consider as they prepare for an era in which the reporting of carbon emissions and climate risks becomes a mandatory, rather than a voluntary, activity. The recommendations address best practices and technology considerations. 

A key point of this report is that leading organizations are looking beyond merely complying with reporting requirements; they are employing data used in reporting to actively plan and take action to drive performance improvement against emissions targets and reductions of climate risk. As a bonus, such efforts often improve business competitiveness and profitability. 

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