- Less than one-third of senior finance and accounting executives have a fully established ESG reporting framework within their company, with 30% disclosing their framework is limited to specific organization initiatives, according to a data report published Tuesday.
- While the majority of surveyed executives said their companies have collected key environmental data, less than 40% have analyzed or used the data to establish benchmarks.
- The report found 97% of executives and 100% of CEOs and chief administrative officers at surveyed companies are involved with their organization’s current state of ESG reporting, despite struggles to establish a proper ESG reporting framework.
The report also found that prioritizing ESG initiatives remains “top-of-mind” for most senior executives at companies, with 90% looking to enact new sustainability goals within the next two to five years
Lease accounting and administration software provider Visual Lease surveyed 200 senior finance and accounting executives across the U.S. at private, public and government organizations with more than 1,000 employees for this report.
The heightened scrutiny surrounding ESG, both regulatory and political, has put a spotlight on companies’ environmental and social initiatives, impacting just about every aspect of their operations, including lease management, according to the report. From the surveyed executives, 88% said sustainability factors are a high priority when entering into new lease agreements, with many taking measures such as increasing the number of LEED-certified buildings within their lease portfolios, expanding the number of energy-efficient vehicles in their fleets or switching to renewable energy sources.
“Considering that 40% of global carbon dioxide emissions stem from real estate-related assets, effective lease management serves as an organization’s gateway to not only quantifying and disclosing its environmental impact but, also to tracking its progress against internal and external sustainability goals,” Robert Michlewicz, CEO of Visual Lease, said in a press release.
With the impending climate disclosure rule from the Securities and Exchange Commission on the horizon, the introduction of several climate bills and workforce disclosure regulations in California, in addition to the coalescence of reporting frameworks such as the International Sustainability Standards Board and the Task Force for Climate-Related Financial Disclosures, executives are concerned about what these new measures will mean for their businesses, according to findings from Virtual Lease.
The survey found that 65% of respondent companies will have to report under the SEC’s climate disclosure rule. Without a final rule to compare yet, 37% of the respondent organizations think the SEC’s rule will mirror ISSB’s guidelines, compared to 28% expecting differences.
Nearly 70% of surveyed senior finance executives said their organizations are not fully prepared to track and measure the environmental impact of their leased and owned asset portfolios in order to comply with new and emerging requirements, according to the report.
The findings indicate companies will need to involve their finance department and evolve their financial strategies to meet regulatory requirements and achieve more strategic ESG outcomes.