Over two-thirds of large U.S. companies have committed to dedicated budgets for sustainability reporting, a recent survey by ESG and EHS solutions provider EcoOnline has uncovered.
According to ESG Today, the research focused on the responses of 95 senior executives from U.S. companies with annual revenues over $500m, shedding light on their readiness to comply with new California laws, SB 253 and SB 261, which mandate comprehensive reporting on Scope 1, 2, and 3 greenhouse gas (GHG) emissions and climate-related financial risks.
The findings reveal a proactive stance among these companies towards sustainability, with 93% having allocated budgets specifically for sustainability and compliance reporting. This includes 68% who have budgets dedicated solely to sustainability reporting, facilitating investments in technology, staff, and processes to better manage and disclose GHG emissions and other sustainability metrics.
A significant 42% of the companies surveyed are going beyond compliance by allocating additional funds to meet the new reporting demands. Meanwhile, 26% are relying on their boards or C-suite to fund necessary technology and manpower. Only a quarter are managing with existing budgets.
Nearly all respondents anticipate an increase in their sustainability and compliance reporting budget, with 30% expecting this rise within the next year, 55% within two to three years, and 14% foreseeing it in over three years. A mere 1% do not plan to increase their spending.
The survey also explored how companies address the challenges of Scope 3 emissions reporting. Thirty-seven percent request suppliers to self-report sustainability data, while a significant 80% provide them with specific reporting templates and requirements. An additional 13% are utilising software solutions to enhance data collection and reporting.
Remarkably, all surveyed executives indicated that their companies would persist in developing their sustainability programs irrespective of regulatory demands, viewing these efforts as integral to driving revenue growth and enhancing brand value. According to the survey, 74% foresee a positive impact on revenue, while 95% expect to boost their brand value through sustainability initiatives.
In terms of leadership, 40% of the companies have their sustainability strategies overseen by their board or CEO, and another 55% have assigned this responsibility to a senior executive or VP within a dedicated sustainability or finance department.
EcoOnline CEO Tom Goodmanson emphasised the shift in corporate strategy towards sustainability, stating, “Our survey highlights a critical tipping point where U.S. companies are boldly moving beyond reactive compliance and penalty avoidance, embracing sustainability as a powerful engine for growth. While they are committed to these initiatives, the specifics of how they will achieve their goals remain uncertain. This underscores the need for clear strategies and robust technology solutions to navigate the evolving regulatory landscape and drive meaningful impact.”
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