Majority of Companies Say They’re Not Ready for ESG Regulations

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Data from global intelligence consultancy S-RM shows that most firms are woefully underprepared to comply with forthcoming regulations.

New ESG regulations are taking hold in the EU, but the vast majority of businesses say they feel underprepared to meet mounting sustainability standards.

“The environment side is the one that everyone we speak to feels is the most developed — that’s where these budgets have gone,” Stafford said, noting that for some firms, it actually may feel like a lighter lift. “I think the environmental side to some degree is a little bit easier to deal with; you set your targets, and those targets generally are pretty far off. You’re not really having your feet held the fire.

Much of that spend will go toward amassing external expertise, from audits to consultants and accreditations, Stafford believes. “There’s a recognition that there may not be that expertise internally, and if an external independent body has come in and done a gap analysis on the human rights policy, for example, or has gone out and done human rights impact assessments at key sites, it gives that bit of protection.

Twenty-two percent of American investors and 24 percent of U.S. corporations surveyed said they were most concerned about the CSRD, while 30 percent of Stateside investors and 16 percent of corporations said they were most worried about the. By contrast, 0 percent of investors and just 3 percent of U.S. corporations said they were most concerned about the UFLPA, and 4 percent of investors and 6 percent of corporations said they were most worried about SEC Climate-related disclosures.

 

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