Some companies are concerned that new climate disclosure rules are overbearing, with one leading executive telling the Reuters IMPACT conference in London that regulations on reporting their carbon emissions and those of suppliers were "over the top".
Many listed companies will have to provide extra information under new European Union rules, with others captured by suggested International Sustainability Standards Board (ISSB disclosures, in their annual reports for 2024 and onwards.
Regulators at Wednesday's event sought to reassure firms worried that they would come down hard on them from day one of the introduction of the EU's Corporate Sustainability Reporting Directive (CSRD) in phases from this year, encouraging them to get ready.
"One thing I would emphasise... is that nobody does sustainability reporting perfectly, I don't think any company is even close to doing it perfectly," Richard Barker, an ISSB board member, told the event.
"Good sustainability reporting at this point in time is to tell us what you've got, and tell us with what degree of reliability do you know what you've got," Barker added.
The new EU requirements replace a patchwork of voluntary private sector norms which regulators say have not been robust enough to stop companies and investors making misleading environmental claims, known as 'greenwashing'.
But sportswear company Puma's head of sustainability, Stefan Seidel, said that the EU requirements would be a challenge.
"We are nowhere near being able to fulfil the requirements of CSRD... So I think it's maybe a bit over the top," he said.
The ISSB and the EU's reporting rules body EFRAG told the conference that their new rules largely overlap when it comes to the impact of climate change on a company's bottom line, meaning costly duplication of reporting can largely be avoided.
"We're working very closely with ESRS (European Sustainability Reporting Standards) on interoperability. It means that preparers shouldn't need to duplicate the information that's required for meeting investors' needs," Barker said.
Marcel Haag, a senior official at the European Commission, said the new disclosure rules will help companies to communicate and manage their sustainability efforts more efficiently.
Richard Howitt, former chief executive of the International Integrated Reporting Council, said complying with the new disclosure rules will have an appreciable cost in the first year to "transform the system", but that the EU and ISSB have both introduced extra phase-in periods to reduce the burden.
"We should not over-react on this topic that is being used by many as a reason to push back on sustainability reporting: the cost of compliance, competitive disadvantage, business secrets - they were exactly the same objections we heard with the introduction of international accounting standards," said Eelco van der Enden, chief executive of GRI.
Companies worry they are being overburdened with regulations and also that they will face different requirements in different jurisdictions as regulators rush to build new rules.
Acknowledging the bloc's regulations were "a work in progress", Helena Viñes Fiestas, Chair of the EU's Platform on Sustainable Finance, said the size of the challenge meant they must be implemented now.
"It is still very early days... we are really working now on how to make it usable, on how to create the tools to make it really useful and simple to use."
To view the live broadcast of the Road to COP Stage, go to the Reuters IMPACT news page: https://www.reuters.com/sustainability/reuters-impact/
