Joint Study with Persefoni Finds Final Climate Rules Present Significant Challenges and Opportunities
MORRISTOWN, N.J., June 18, 2024 /PRNewswire-PRWeb/ -- The Financial Education & Research Foundation (FERF)—the independent non-profit research affiliate of Financial Executives International (FEI)— today released the findings of its latest Benchmarking Sustainability Report. This report is a joint effort with Persefoni, a leading Climate Management & Accounting Platform (CMAP) for corporations and financial institutions.
The report examines how sustainability reporting continues to hold an important and growing role for companies, how regulatory sustainability prioritization has impacted reporting efforts, and how finance functions are evolving in response to new reporting requirements. In response to the new requirements, finance teams are redefining sustainability reporting strategies from the infrastructure to the human capital needed to power internal and external reporting. The research also provides a first glance into challenges and opportunities for private companies.
"Sustainability reporting is one of the most transformative challenges finance professionals are facing today," said Andrej Suskavcevic, CAE, President and CEO of Financial Executives International and Financial Education & Research Foundation. "This report specifically addresses what our members need to know to pilot their organizations through ever-evolving informational demands from internal and external stakeholders."
Key Findings Include:
The various standards and regulatory requirements have created a significant compliance burden:
- Over 90% of responding companies are planning to increase their reporting emphasis on the requirements under the SEC's final climate rule.
- Just under 90% of responding companies are planning to increase their reporting emphasis on the requirements in the European Union's Corporate Sustainability Reporting Directive (CSRD) and California's climate legislation.
Finance teams are dealing with diverse challenges: - Nearly half of survey respondents (48%) reported various obstacles, such as difficulty in obtaining Scope 3 data, struggling without a clear reporting mandate, and limited budgets.
Companies have made significant changes and investments to increase external and internal reporting capabilities in response to strategic demands and changes in the sustainability-reporting landscape:
- 87% plan to increase their internal reporting efforts.
- 59% plan to increase the integration of carbon data within existing risk management reporting.
- 53% plan to add new Scope 3 categories to their current Scope 3 reporting.
"We are thrilled to announce our third research collaboration with FEI. This collaboration observes a notable increase in the participation of finance professionals in the carbon accounting process. Finance plays a pivotal role in accessing crucial financial and operational data, facilitating swift conversion into carbon emissions insights," said Persefoni CEO and Co-founder, Kentaro Kawamori, adding "consolidating this data into a unified platform empowers finance professionals to swiftly discern their most significant impacts and strategize decarbonization initiatives in their carbon accounting journey."
Methodology and Sources
FERF and Persefoni collaborated to develop a collection of surveys and interview questions aimed at uncovering the practical challenges US companies are facing as they transition from voluntary to more regulated sustainability reporting. This research seeks to understand the sustainability frameworks and standards where organizations are increasing their focus over the next year, how finance functions are evolving to support increased sustainability reporting, how private companies are impacted by increased sustainability reporting requirements, and the key technological adoption trends as companies scale their processes to adhere to these sustainability reporting requirements.
The report and its findings are based on a collection of surveys distributed to finance professionals from US-headquartered companies, the first of which was sent to representatives of publicly traded companies and the second to representatives of privately owned companies.
In total, more than 50 chief accounting officers and controllers from some of the largest US public companies participated in the first survey; a subset of those participating in the surveys (6) took part in qualitative research interviews. For the first time, FERF sought to study the private company perspective on sustainability reporting. They surveyed a limited sample of private company CFOs and controllers (25) and spoke to one private company CFO in a follow-up interview.
The full report can be viewed at: https://www.financialexecutives.org/Research/Publications/2024/Benchmarking-Sustainability-Reporting.aspx.
About Financial Education & Research Foundation, Inc.
Financial Education & Research Foundation (FERF) is the non-profit 501(c)(3) research affiliate of Financial Executives International (FEI). FERF researchers identify key financial issues and develop impartial, timely research reports for FEI members and nonmembers alike, in a variety of publication formats. FERF relies primarily on voluntary tax-deductible contributions from corporations and individuals, and publications can be accessed at https://www.financialexecutives.org/Research.aspx.
About FEI
Financial Executives International (FEI) is the leading association and advocate for the views of corporate financial management. Its members hold policy-making positions as chief financial officers, chief accounting officers, controllers, treasurers, and tax executives at companies in every major industry. FEI enhances Member professional development through peer networking, career management services, conferences, research, and publications. Members participate in the activities of local Chapters in the U.S. FEI is located in Morristown, NJ. Visit http://www.financialexecutives.org for more information.
About Persefoni
Persefoni AI Inc. offers businesses and financial institutions the software and AI tools to manage their organization's climate-related data, disclosures, and performance with the same level of rigor and confidence as their financial reporting systems. With our platform, organizations can streamline their carbon footprint calculations, develop and oversee decarbonization strategies, and generate audit-ready sustainability reports. For more information about Persefoni, please visit https://www.persefoni.com/.
Media Contact
Lili DeVita, Financial Executives International, 973.765.1021, ldevita@financialexecutives.org, www.financialexecutives.org
Anna Maldonado, Persefoni, 520.981.4736, press@persefoni.com, https://www.persefoni.com
SOURCE Financial Executives International
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