In recent years, government agencies and regulators have enhanced their ESG-related disclosure rules and guidelines for publicly traded companies, and in many jurisdictions, these are already being used to investigate “greenwashing” claims and fiduciary-duty violations.
Companies are now looking for relevant subject matter expertise to help them develop appropriate mechanisms and procedures for proper reporting and implementation.
In these efforts, education is key for deeper understanding of companies’ ESG reporting needs and a solution to many of their challenges.
In March 2022, the SEC proposed rules on climate-related disclosure that would require publicly traded companies to provide additional disclosures on potential climate change risks and efforts to mitigate their environmental impacts. Companies would also be required to provide data on their Scopes 1 and 2 GHG emissions and energy consumption. Scope 3 emissions, generated by a company’s suppliers and customers, may also be covered in these rules.
Similarly, the European Union (EU) is finalizing the Corporate Sustainability Reporting Directive (CSRD), which will require large public-interest companies with more than 500 employees to disclose environmental and social matters starting in the 2024 fiscal year. The United Kingdom (UK) has established mandatory requirements for its largest UK-registered companies and financial institutions to disclose climate-related financial information in alignment with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD).
These are just some examples of the push for greater reporting and disclosure that have been introduced recently. Many other jurisdictions are adopting similar conditions such as the new ESG reporting requirements in Hong Kong and Singapore.
In the sustainability and ESG space, recent studies have shown that while ESG has grown in prominence and importance, business schools and universities have not kept up, and the result has been a gap in the professional training that business leaders are receiving prior to entering the workforce.
For example, LinkedIn’s 2022 Green Economy Report found that the growth in demand for workers with green skills, including environmental sustainability expertise, has outpaced the growth in the supply of green talent. While job postings requiring green skills grew at 8% annually between 2017–2022, the share of green talent has grown only 6% in the same period. Similarly, a recent Toronto Finance International (TFI) report found that 7 in 10 surveyed financial companies said the supply of sustainable finance professionals did not meet demands. These are all significant reasons to justify the importance of the business community taking a more direct approach to investing in and supporting lifelong learning and educational efforts around the globe.
If companies are going to be able to meet the increasing demand for talent capable of understanding and addressing ESG requirements and regulations, they will need to invest in educational resources designed to ensure that secondary and post-secondary institutions are preparing students for that reality.