What the SEC’s new climate transparency rules mean for you

What the SEC’s new climate transparency rules mean for you

The opinions expressed by Entrepreneur authors are their very own.

Discussing sensitive topics might be a challenge for business owners. This is one of the three or 4 important reasons I get the first calls for public relations help on a pressing topic. The latest confusing trend is sustainability and the right way to talk openly about it. Surprisingly, people need clarification on how much to speak about it, why it is important, and when to say it. There’s even a new word for this fear: “greenhushing.”

- Advertisement -

The latest push for firms in eco-messaging comes from the U.S. Securities and Exchange Commission (SEC) recent enforcement efforts that protect investors and maintain market integrity. Essentially, the SEC modified the environmental transparency rules and introduced mandatory climate risk disclosures by public firms.

This is the first time that a sustainability mandate has appeared at national level and is expected to have a noticeable impact. In my opinion, even for private firms, this is a call to listen and stop neglecting this discussion.

We are entering an era where climate targets and governance frameworks will turn into mandatory in corporate reporting. This change also matches into growing consumer demand for environmentally and ethically sustainable products – a trend that, despite its popularity, implies that many firms are struggling to translate it into measurable demand.

The paradox of consumer demand and greenwashing

Consumers’ enthusiasm for sustainable products often contrasts starkly with their actual purchasing behavior. While research shows a strong push for sustainability, sales often have to catch up with expectations for new, eco-friendly products. This discrepancy is exacerbated by “eco-science” – when claims about environmental stewardship are not supported by practice – which further undermines consumer confidence and complicates the landscape of real initiatives.

I’d advise every company today to arrange to debate and engage around sustainability. This is an inevitable topic as of late. Since I have been a part-time marketing director and external public relations consultant since 2002, I have fielded many calls from firms facing these watershed moments. This is the advice I’d give to a leadership team trying to be more vocal about sustainability.

The imperative of transparency

In this context, the need for transparency is undeniable. Beyond mere regulatory compliance, transparency is key to building consumer trust and loyalty. Businesses now must actively measure and improve their approach to climate change, so this journey must start with a comprehensive understanding of their environmental footprint, including greenhouse gas emissions, resource use and waste generation.

This baseline assessment, typically conducted by external consultants or an internal sustainability team, is crucial to establishing realistic sustainability goals and improvement strategies. Using standard tools and frameworks comparable to Greenhouse Gas Protocol AND Life cycle estimation provides a methodical approach to this task and will result in data and patterns that you can consistently use in your communications activities.

Armed with this data, you can set specific and time-bound goals that can meet compliance requirements (if crucial) and drive significant environmental and social improvements. Engaging stakeholders, particularly employees, at this stage helps bring any practical concerns to the surface and integrate these insights into the goal-setting process.

The role of public relations in implementation

Sustainable public relations goes beyond just issuing press releases. PR is a strategic tool for amplifying and integrating climate change initiatives into the corporate ethos. A compelling story highlighting a company’s progress and sustainability impact can significantly improve its repute and increase credibility with third parties.

Using a number of channels – from press releases and social media to comprehensive sustainability reports – enables these stories to succeed in and resonate with a wide audience, driving engagement and supporting the sustainability agenda.

It is essential to cultivate a culture focused on sustainable development internally. Companies can be certain that sustainability principles are deeply embedded in every aspect of their business through regular educational programs, lively participation in sustainability initiatives, and recognition of individual and team contributions. This not only strengthens the company’s commitment to sustainable development among employees, but also mobilizes them and other stakeholders as ambassadors of those values.

Continuous monitoring and evaluation of sustainability initiatives and how they are perceived by society are necessary measurement points to contemplate when assessing progress. As with any significant initiative, establishing and tracking key performance indicators (KPIs) allows firms to measure performance and discover areas for improvement. Moreover, engaging with employees and stakeholders through feedback will enrich the process and provide insight into the real world.

It seems counterintuitive, but in my experience, challenge often comes with opportunity. Tackling difficult topics can uncover opportunities for innovation, stakeholder engagement and corporate responsibility that will otherwise lie dormant. Talking specifically about sustainability does not all the time mean compliance. This is your opportunity to draw buyers and lead the market with integrity, innovation and vision.

Latest Posts

Advertisement

More from this stream

Recomended