Companies brace for new sustainability rules

Companies are bracing for the Securities and Exchange Commission's climate-related disclosure rule, according to a new survey.

The report, released Tuesday by the lease accounting software company Visual Lease, polled a group of senior accounting and finance executives and found that 90% of the respondents are looking to enact new sustainability goals within the next few years. However, only 32% of organizations have a fully established environmental, social and governance reporting framework, and 10% do not have an ESG framework at all.

Approximately two-thirds (65%) of organizations with more than 1,000 employees will be reporting under the SEC's yet-to-be-finalized requirements, according to the report. The survey also asked about the International Sustainability Standards Board's recently released climate and sustainability standards, and found that 37% of organizations believe the SEC requirements will mirror the ISSB guidelines, while 28% believe the SEC requirements will be different than the ISSB guidelines. 

Chris Ratcliffe/Bloomberg

The vast majority (88%) of the surveyed senior accounting and finance executives report that environmental and sustainability factors are a high priority when entering into new lease agreements, including real estate, fleet, equipment, land, etc. These include the number of LEED-certified buildings in their lease portfolios or increasing the number of energy-efficient vehicles in their fleets. Some 49% are increasing the number of LEED-certified buildings in their lease portfolios, 45% are increasing the number of LEED-certified buildings in their lease portfolios, 41% are switching to renewable energy sources, and 35% are buying carbon offsets.

In addition, 84% say lease management is a higher priority now as a result of rising interest in sustainability efforts and impending reporting requirements. While the majority of surveyed finance executives indicated they have collected key environmental data, less than 40% have analyzed or used the data to establish benchmarks.

Nearly 40% of global carbon dioxide emissions originate from real estate-related assets, according to the report, and proper lease management is an organization's entry point to not only measuring and reporting on their environmental impact, but also understanding how to make improvements for a more sustainable future.

In a previous survey released earlier this year, Visual Lease reported that 99% of senior real estate executives at companies with more than 1,000 employees noted that it is important that their organization's future leases help reduce its carbon footprint. 

"The majority of surveyed senior finance and accounting executives have reported that while they've collected key environmental data, less than 40% have analyzed or used the data to establish benchmarks," said the new report. "This delay can be attributed to a few different reasons: Some may be very early in the gathering process with incomplete data, others might not trust their data yet due to weak processes, inadequate controls and/or a lack of a centralized view of their leased and owned asset records. All of these issues are impediments to being able to access and analyze a portfolio to establish accurate benchmarks."