{"id":675962,"date":"2024-05-28T05:32:28","date_gmt":"2024-05-28T12:32:28","guid":{"rendered":"https:\/\/www.esri.com\/about\/newsroom\/?post_type=wherenext&p=675962"},"modified":"2024-05-28T05:35:14","modified_gmt":"2024-05-28T12:35:14","slug":"with-sec-rule-climate-risk-transparency-is-becoming-the-new-norm-for-businesses","status":"publish","type":"wherenext","link":"https:\/\/www.esri.com\/about\/newsroom\/publications\/wherenext\/with-sec-rule-climate-risk-transparency-is-becoming-the-new-norm-for-businesses","title":{"rendered":"With SEC Rule, Climate Risk Transparency Is Becoming the New Norm for Businesses"},"author":501,"featured_media":0,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"sync_status":"","episode_type":"","audio_file":"","podmotor_file_id":"","podmotor_episode_id":"","castos_file_data":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","filesize_raw":"","date_recorded":"","explicit":"","block":"","itunes_episode_number":"","itunes_title":"","itunes_season_number":"","itunes_episode_type":"","_links_to":"","_links_to_target":""},"categories":[],"tags":[482722,471742,180112,382132],"department":[488822],"wherenext-category":[],"industry":[],"class_list":["post-675962","wherenext","type-wherenext","status-publish","format-standard","hentry","tag-carbon-credits","tag-climate-risk","tag-compliance","tag-decarbonization","department-sustainability-risk"],"acf":{"short_description":"The SEC\u2019s new climate disclosure rule joins a wave of regulations prompting corporations to update climate-reporting strategies.","pdf":{"host_remotely":false,"file":"","file_url":""},"flexible_content":[{"acf_fc_layout":"content","content":"In March, the Securities and Exchange Commission (SEC) adopted the US\u2019s first national climate disclosure rules, requiring public companies to report climate-related impacts and risks to business operations and strategy."},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Left","content":"Snapshot<\/strong>: The SEC says public companies must disclose climate-related risks and emissions. Courts may decide whether they stand, but global brands are already using location tech to analyze exposure.","snippet":""},{"acf_fc_layout":"content","content":"The controversial ruling, which attracted the most comments in SEC history<\/a>, has ended up in court<\/a>. However the case plays out, the verdict is already clear for many CEOs: climate risk transparency is the new reality.\r\n\r\nThe SEC initiative comes on top of the European Union\u2019s 2023 sustainability reporting<\/a> rules, as well as California\u2019s climate disclosure bill<\/a>, signed into law the same year. Executives are taking notice of the trend and adding tools and talent to their organizations<\/a> to strengthen climate risk analysis and reporting capabilities.\r\n\r\nEvaluating climate risk requires a strong grasp of geography. It\u2019s impossible to measure a cell tower\u2019s level of exposure to coastal flooding, or a retail store\u2019s vulnerability to hurricanes, without analyzing and understanding critical datasets about the location of those assets and threats. Geographic information system (GIS) technology<\/a> is helping business leaders gain the spatial perspective needed to anticipate the impacts of climate hazards.\r\n\r\nCombining a centralized system of data collection with the visual medium of maps, GIS gives compliance officers quick access to accurate information for reporting requirements.\r\n

Comprehensive Climate Disclosure, Across Space and Time<\/strong><\/h3>\r\nFor many businesses, GIS-driven location intelligence<\/a> already guides efforts to mitigate climate impacts and increase resilience\u2014another element the SEC would require firms to disclose to investors."},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Left","content":"Related Reads:<\/strong>\r\n\r\n\/\/ What does it mean to disclose Scope 3 emissions<\/a>?\r\n\r\n\/\/ Risk management<\/a> is the new competitive advantage","snippet":""},{"acf_fc_layout":"content","content":"If the rules go into effect, affected companies will have to disclose costs incurred from climate-related damage, Scope 1 and 2 emissions<\/a>, plans to mitigate climate risk, and related costs such as renewable energy systems or carbon credits<\/a>.\r\n\r\nFor business leaders anticipating the outcome of the SEC rules, GIS analysts can create dashboards that layer climate data over a basemap of company assets and operations. Such a map might show warehouses, equipment like heavy machinery, shipping routes, retail stores, or vehicle fleets, as well as trends in extreme weather like flooding, wildfire, or excessive heat.\r\n\r\nUsing location technology, a compliance officer could select a past year from a drop-down menu and view specific incidents of storm damage at company facilities. Clicking a link in the map could take the employee to data and information about financial losses caused by those events.\r\n\r\nBusinesses would also need to report information gleaned from predictive models of climate risks. Companies ranging from major telecommunications firms<\/a> to a government-backed mortgage buyer<\/a> use GIS to chart how climate threats may impact their operations in the future. Such models can distill many factors\u2014climate projections, location, event histories from comparable areas\u2014into a threat outlook that simplifies the process of disclosing risk information.\r\n

Tracking Resilience and Reduction<\/strong><\/h3>"},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Left","content":"GIS can organize and analyze information related to the SEC rule, including:\r\n