(Reuters) – More than half of companies in the S&P 500 now use a common standard from the Value Reporting Foundation to report on topics like carbon emissions and energy management, indicating executives are paying more attention to an area likely to face new regulations soon, a foundation official said.
“The market has already got a lot of momentum in the direction the SEC (U.S. Securities and Exchange Commission) is pushing for,” Neil Stewart, director of corporate outreach for the global nonprofit organization, said in an interview.
As of Aug. 31, 324 companies in the S&P 500 used the foundation’s standard, up from 201 companies at the end of 2020, according to the group, which is backed by large asset managers including BlackRock Inc and State Street Corp.
The guidance describes how companies in different sectors should disclose environmental, social and corporate governance (ESG) matters.
The standard is also gaining more usage in non-U.S. indexes, the foundation said. Use of a different ESG effort, the Global Reporting Initiative, has also grown, with at least 10,000 users worldwide, a spokesman for the initiative said.
The SEC this year requested public comments on how it might direct companies to report similar material on their climate impact and other areas. Agency officials did not immediately comment on Friday on the status of the review.
In a “sample letter” on its website, the SEC described the sort of questions it asks of companies currently.
These could include questions about litigation risks related to climate change, or requests for companies to explain why statements made in voluntary corporate social responsibility reports are different from those made in SEC filings.
“The takeaway for me is that companies should be taking this as an opportunity to re-evaluate their materiality decisions in climate matters,” Covington attorney Matthew Franker said.
(Reporting by Ross Kerber in Boston; Editing by Sonya Hepinstall)