ESG regulations and your company

Actions you can take now to transform your ESG reporting strategy

Europe’s CSRD is one of the latest global disclosure regulations revolutionizing ESG reporting.

The Corporate Sustainability Reporting Directive is aimed at driving change in the business behavior of an estimated 50,000 companies that operate in the EU, which includes US companies with EU subsidiaries that meet certain criteria. CSRD reporting requires companies to analyze a range of sustainability issues and relate them to financial opportunities and risks as well as an organization’s impacts on society and the environment. 

The CSRD joins California’s climate disclosure rules, which were enacted in 2023 and could impact more than 10,000 publicly traded and private companies. The rules outline extensive reporting on greenhouse gas emissions, climate-related financial risks and claims around achieved emissions reductions.  

Companies also need to stay on top of developments surrounding the SEC’s recently adopted climate disclosure rules that require them to publish information that describes the climate-related risks that are reasonably likely to have a material impact on a company’s business or consolidated financial statements. 

As companies assess how these disclosure rules and regulations impact their broader ESG reporting strategy, there are several fundamental actions they can take to progress along their journey as compliance deadlines near. Regardless of where you are on that journey we're here to help.  Let’s get started. 

Three things your company can be doing now to comply with ESG regulations

Global ESG disclosure regulations vary in scope, detail and timelines for compliance. Many also outline requirements to obtain attestation performed by an independent attest provider. Companies will need to develop an effective controls environment and accelerate their ability to collect, manage and measure ESG data. While the CSRD may be top of mind, these steps may also help you with other global regulations.

Determine scope: While there is some overlap between ESG regulations, the sustainability disclosures, the companies in scope and the timelines for compliance can be different depending on which set of rules your company is assessing. As your company evaluates these regulations, it will need to consider applicability at multiple levels of the organization to determine if all reporting obligations have been identified. 

Assess sustainability risks across the business: While the topics addressed by ESG regulations vary, many include a focus on greenhouse gas emissions and other climate-related matters. But understand that many ESG regulations require reporting beyond climate topics, such as biodiversity, pollution, and certain workforce metrics. Most frameworks also require a description of how risks are identified and managed and board oversight of identified risks. The identification of the applicable risks is fundamental and is an area in which it’s particularly important to break down silos and bring a cross-functional approach.  

Get stakeholders aligned and educated: The organizational shifts companies will face to comply with global regulations will entail a lot of change. This may include employees taking on new roles, responsibilities moving between functions, new systems and processes and, not least of all, higher stakes and increased expectations around how companies tell their climate stories. Some employees may need upskilling. Others may simply need clear communication about what’s different and why. No matter what, effective communications and change management rooted in trust are critical.

Start now: The four steps companies should consider as you prepare for climate regulations

Determine your climate reporting strategy

What do regulations require you to report? How does that relate to your company’s narrative? How will you resource reporting functions? 

  • Understand what the global ESG regulations require so that your company can build a sustainable path to cleaner ESG data.  
  • Begin preparing your climate reporting strategy. Assess potential risks from climate change, including physical climate risks and risks related to transitioning to a lower carbon economy. 
  • When gathering data for scope 1 and scope 2 emissions, consider collecting and measuring scope 3 emissions data. While the SEC rules don’t require scope 3 emissions, other US and global regulations do. 
  • Understand what process and organizational changes can be made that will help increase the speed, quality and reliability of climate reporting in order to include emissions data and other metrics within the prescribed timeframes. 
  • Consider the resources needed to execute on your strategy. 
  • Develop an operating model to sustain executive engagement and create accountability.
  • Assess ongoing progress and solicit investor and stakeholder feedback.

Here’s how ESG regulations may impact executives across the organization

Industries will be impacted by the SEC climate disclosures and other ESG regulations in different ways: Now is the time to evolve your operating model to meet the moment


Contact us

Kevin O’Connell

Kevin O’Connell

Sustainability Reporting and Assurance Leader, PwC US

Ron Kinghorn

Ron Kinghorn

Sustainability Strategy and Operations Leader, PwC US

Brigham McNaughton

Brigham McNaughton

Sustainability Partner, PwC US

Heather Horn

Heather Horn

Partner, National Office Thought Leader, PwC US

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