CSR Compliance and Regulations

The world isn’t ready for what’s coming next in sustainability data. We’re quietly living through the creation of a financial infrastructure for sustainability—and it’s happening faster than most realize. Over 2,000 sustainability regulations have emerged globally in the past decade, with a 155% surge in ESG-related rules since 2018. This isn’t just about compliance—it’s a fundamental shift in how we define value, risk, and performance. What’s driving it? • EU: CSRD & ESRS will impact over 50,000 companies, embedding double materiality. • India: BRSR Core is mandatory for top 1,000 listed firms. • China: CSDS expands carbon reporting in high-impact sectors. • California: SB 253/261 reshape U.S. climate disclosures. • Australia: AASB S2 aligns with IFRS S2, effective in 2025. • Brazil: CVM 193 adopts IFRS-aligned sustainability standards. • And more: Japan, Canada, Singapore, Nigeria, Turkey—all aligning with global standads. We’ve entered a phase where climate, nature, and transition risks are becoming embedded in financial decision-making—from underwriting and M&A to risk pricing and insurance modeling. In the real estate sector, GRESB has made third-party verified performance data (GHG, energy, water, waste) a best practice. ESG metrics are now more embedded in due diligence for loans, equity, and new acquisitions. Yes, today’s data is often backward-looking. And yes, we still need science-based thresholds and stronger assurance. But this foundational work is what allows us to get there. Without reliable, standardized, machine-readable data, we can’t scale action, track progress, or hold anyone accountable. Just as GAAP and IFRS created trust in financial markets, IFRS S1/S2, CSRD, and the GHG Protocol are setting the stage for credible, comparable sustainability data. It will not be a “parallel system.” in the future. We are building the groundwork for full integration into the global financial system. This shift will transform: • How we price risk • How capital is allocated • How resilient companies are rewarded • How we define long-term value creation It’s messy. It’s political. It’s imperfect. But it’s also historic. If you’re in this space, you’re not just reporting data—you’re helping build a new operating system for business and capital markets. One that rewards transparency, resilience, and climate alignment. Let’s keep building—with more rigor, more ambition, and more impact.

Criteria for Climate & Net Zero Reporting 🌎 This framework, developed by KPMG, provides a clear and practical benchmark to evaluate the quality of corporate climate and net zero disclosures. It is based on international best practices and draws heavily from the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The criteria are grouped into four focus areas: Governance, Risk Identification, Impacts, and Net Zero Transition. Each area outlines specific reporting elements that reflect the maturity and robustness of a company’s approach to climate-related issues. Under Governance, disclosures should show that board-level responsibility has been assigned to oversee climate matters. In addition, climate risks should be referenced in the Chair or CEO’s message, and the company should clearly acknowledge climate change as a material financial risk. In the Risk Identification category, strong reporting includes a dedicated climate risk section in the annual report or a standalone TCFD-aligned report. It should also cover both physical risks (e.g., extreme weather) and transitional risks (e.g., policy shifts or market changes). Impacts criteria emphasize the importance of scenario analysis to understand how different climate outcomes could affect the business. Companies are expected to report using multiple warming scenarios and clear timeframes, relying on reputable sources such as the IPCC or IEA. The Net Zero Transition section highlights the need for science-based or net zero targets. A credible strategy for decarbonization should be disclosed, including the actions the company will take and the timelines involved. Transparent progress tracking is also essential. Disclosures should communicate whether the company is on track to meet its targets, identifying any challenges or adjustments made along the way. Finally, the use of an internal carbon price is seen as a strong indicator of preparedness for future regulation. It demonstrates that climate-related financial risks are being factored into planning and investment decisions. Source: KPMG #sustainability #sustainable #business #esg #reporting

A New Chapter in UAE Climate Action In a few days, Federal Decree-Law No. (11) of 2024 on the Reduction of Climate Change Effects will come into effect. This marks a significant step in the UAE’s commitment to climate resilience and sustainable development. The law establishes a comprehensive framework focusing on: ✅ Reducing greenhouse gas emissions (mitigation) ✅ Enhancing resilience to climate risks (adaptation) ✅ Promoting innovation in low-carbon technologies ✅ Facilitating data sharing and transparency ✅ Integrating sustainability into national development strategies For companies operating in the UAE, this is not just a legal obligation, it’s a strategic opportunity.  It's time to align your operations with the nation’s climate ambitions. How can companies prepare? 🔹 Develop a comprehensive greenhouse gas (GHG) inventory to understand emissions profiles 🔹 Conduct climate risk assessments across operations and supply chains 🔹 Set measurable decarbonisation targets and implement actionable strategies 🔹 Invest in training and capacity building to embed climate awareness throughout the organisation Non-compliance may result in financial penalties, underscoring the importance of proactive planning and robust internal governance. This is a pivotal moment for organisations to lead with purpose, clarity, and accountability. The transition to a sustainable, low-carbon economy is underway, and those who act decisively will be best positioned for success. For more details about the federal decree, visit: https://lnkd.in/dkdRsbSr

ISO - International Organization for Standardization x Greenhouse Gas Protocol (GHG Protocol) : A Partnership That Could Redefine Carbon Accounting One of the persistent challenges in global decarbonization efforts has been the fragmentation of greenhouse gas (GHG) standards. Companies often juggle ISO frameworks for compliance and GHG Protocol standards for disclosure, leading to overlaps, inefficiencies, and at times, confusion. The newly announced ISO–GHG Protocol partnership changes that equation. By harmonizing their portfolios into co-branded international standards, they are creating what amounts to a “common language” for emissions accounting. 💡 Why this matters: For businesses: Fewer frameworks to navigate, stronger clarity in reporting, and greater efficiency in supply chain engagement. For investors: Consistent, comparable, and reliable data to inform capital allocation decisions. For policymakers: A unified foundation that simplifies regulation and raises accountability standards. ⚙️ Strengthening Industry Loops This partnership has the potential to tighten the feedback loops across the sustainability ecosystem: 1.Corporate reporting feeds into investor decision-making with greater credibility. 2.Policy and regulation can align seamlessly with global standards. 3.Supply chains gain consistency, reducing duplication of efforts and enabling more granular data-sharing. ♻️The Bigger Take ! If successful, the ISO–GHG Protocol collaboration could accelerate the pace of corporate decarbonization, raise ambition levels across industries, and build trust in net-zero pathways. More importantly, it reframes carbon accounting not as a compliance burden, but as a strategic enabler of sustainable growth. In other words: harmonization is not just technical-it’s transformational. #Sustainability #ClimateAction #ISO #GHGProtocol #Decarbonization

How transparent should companies be about their climate impact in the US? Imagine: You’re an investor trying to assess a company’s future. You ask yourself, Are they prepared for the risks of climate change? How do their operations affect the environment, and are they doing anything? Now Imagine you don’t have clear answers because the data is inconsistent or missing. This is the reality many investors have faced for years, but big changes are on the horizon in the U.S. In March 2024, The U.S. Securities and Exchange Commission (SEC) adopted new climate disclosure rules that could reshape how companies communicate their climate risks and actions. These rules aligned with global standards like the Task Force on Climate-Related Financial Disclosures (TCFD) and the Greenhouse Gas Protocol require public companies to report on: -How climate risks affect their strategy and operations. -Greenhouse gas emissions (Scope 1 and Scope 2 for large filers, Scope 3 if material). -Board and management oversight of climate-related risks. -Financial impacts of severe weather and carbon offsets. If implemented, these rules might take effect as early as January 2025. But they’re not without challenges legal battles could shift timelines or outcomes. Meanwhile, California is setting its own pace with new laws, SB 253 and SB 261, targeting large corporations. These laws go even further: -Companies earning over $1 billion must disclose emissions across all three scopes by 2026. -Companies earning over $500 million must publish biennial reports on how climate risks affect their finances and supply chains. Here’s the thing: Scope 3 emissions are notoriously difficult to measure. Yet, they often make up the largest share of a company’s carbon footprint. So, Why does this matter? From my perspective, These regulations aren’t just about compliance. They’re about accountability. They demand that companies be honest and transparent about their environmental impact. And that’s something investors, employees, and consumers increasingly care about. According to a recent survey, 85% of investors consider ESG factors in their decisions. I believe this is where leadership matters most. Leaders who embrace these changes signal that their companies are not just surviving today but preparing for tomorrow. What do you think about these new regulations? Will they push companies to do better or overwhelm them with compliance?

Today, I came across a 'Sustainability Compliance Tech Map' designed to guide companies through the maze of solutions for compliance. It is a helpful resource, but it raises a critical question: Are we going to create new tools for each regulation? Or can we embed compliance into the digital backbone we’re already building? Reflecting on the Budapest Declaration, I encourage our industry to rethink this approach. Rather than inventing new solutions, let us leverage what we already have. At 9altitudes, we base our projects on powerful platforms like Microsoft, PTC, and Tulip Interfaces - solutions that support robust, scalable digital common threads across industries and enable integrated, data-driven compliance. Compliance should not be a standalone task. It should be a natural extension of the CAD, PLM, MES, ERP, and commerce platforms we rely on daily. By embedding compliance into these systems, it becomes an integral part of operations, connecting all data seamlessly. Industry efforts like the IDTA - Industrial Digital Twin Association, using frameworks like the Asset Administration Shell (AAS), already bridge systems for initiatives like the Digital Product Passport (DPP) without adding unnecessary complexity. Similarly, Microsoft Purview Compliance Manager helps companies assess and manage compliance across multicloud environments, building on existing architectures rather than creating silos. The future of compliance lies in enhancing our digital thread with smart data layers that integrate, communicate, and govern information across functions. Let us use this moment as a call to action. Compliance should not be a burden but a seamless part of the journey - helping us build a sustainable, resilient ecosystem for the future. I invite our colleagues, partners, and industry leaders to share their perspectives. Are you using existing platforms or adding new layers? Let us discuss how we can collectively build a sustainable future by leveraging the solutions we already have. Please feel free to comment, share, or engage with your thoughts. Together, we can make compliance smarter, simpler, and truly impactful. With all respect: what we need is not more legislation or more tech maps - it is a commitment to maximizing the solutions we already have, leveraging them to build a sustainable future. Agree ? #DigitalThread #Sustainability #Compliance #BudapestDeclaration #Microsoft #PTC #Tulip #9altitudes #Industry40 #Industry50 #DigitalTwin #ERP #PLM #MES

India's Banks to Face Climate Transparency Test The Reserve Bank of India (RBI) is preparing to release a mandatory climate risk disclosure framework for banks within the next few months. This move aligns India with growing global regulatory trends that recognize the systemic risks posed by climate change to financial systems. These upcoming rules are expected to be based on the following frameworks: # RBI Discussion Paper on Climate Risk and Sustainable Finance (2022) # Task Force on Climate-Related Financial Disclosures (TCFD) framework # India’s commitment to net zero by 2070, under the Paris Agreement Legal implications: # Banks will be required to conduct scenario analysis and stress testing. # Disclosures will likely be aligned with SEBI’s BRSR (Business Responsibility and Sustainability Report) norms. # Non-compliance could lead to supervisory actions under the Banking Regulation Act, 1949. What Borrowers Must Do Now To prepare for these upcoming regulations, borrowers should: 👉Start ESG Reporting: Track and publish sustainability metrics relevant to your sector. 👉Assess Climate Risks: Identify operational and financial exposure to physical and transition risks. 👉Build a Sustainability Roadmap: Set realistic targets for emissions, energy use, and environmental impact. 👉Engage with Lenders: Proactively share climate-related data with banks to maintain creditworthiness. 👉Certify Green Projects: Get third-party validation for green bonds, renewable energy initiatives, etc. Source: Reuters #Corporategoveranance #Independentdirectors #ESG #ClimateRisk #SustainableFinance #ClimateDisclosure #GreenBanking #RBIRegulations

Great example of sustainability communication that doesn't really celebrate success but rather failure Oatly's latest sustainability report offers a great example of a board-level risk governance. Instead of sanitising results, they transparently disclosed a 15% increase in corporate climate footprint, 30% jump in packaging emissions, and 24% rise in ingredient emissions. It is understandable to prefer to communicate only reached goals but sometimes the process of implementing a sustainability agenda takes time and changes course. For companies across all industries, this approach demonstrates several critical governance principles that extend far beyond sustainability reporting. Regulatory preparedness: As disclosure requirements change globally businesses that establish transparent reporting cultures today protect their organisations from future compliance failures and penalties. Stakeholder trust management: Investors, customers, and employees value authenticity over perfection. Companies that acknowledge operational challenges while demonstrating systematic measurement build stronger long-term relationships than those that present unrealistic success narratives. Litigation risk mitigation: Recent settlements in greenwashing cases have reached hundreds of millions when public claims don’t align with internal data. Boards that insist on accurate disclosure protect shareholder value and personal director liability. Strategic decision-making: Honest sustainability data, including unfavorable trends, enables better resource allocation and strategic planning. Boards cannot provide effective oversight with incomplete or misleading information. Sustainability communication is not always about celebrating successes. The most effective reports directed at consumers or board oversight acknowledge that complex operational changes involve tradeoffs, unintended consequences, and sometimes temporary setbacks that require transparent explanation to stakeholders. Whether the topic is cybersecurity, supply chain resilience, or climate impact, health and safety, the governance principle remains consistent: transparent measurement following the science and honest disclosure protect long-term enterprise value. #board #governance #directorduties #riskoversight #esggovernance #esg #insights #corporategovernance #fudicialduties

Corporate Sustainability Reporting Directive (#CSRD) is changing the game. And PwC's guidebook is here to help you stay ahead. It simplifies the process of preparing sustainability statements that meet the European Sustainability Reporting Standards (ESRS). Here’s what you need to know: • Start with structure. Sustainability statements are broken down into four key sections: General, Environmental, Social, and Governance (ESG). Simple, right? • Double materiality is key. This means looking at the environmental and social impacts of your operations, while also considering how sustainability affects your financial performance. • Think financial impact. You’ll need to show how sustainability risks and opportunities influence profits, balance sheets, and cash flows, both now and in the future. • Boards have a big role to play. They must integrate sustainability into strategy, ensure accurate reporting, and align executive pay with ESG goals. • Climate action is front and center. Transition plans, emissions data, and the financial impacts of climate risks are non-negotiable under ESRS E1. • Don’t forget the EU Taxonomy. Reporting on sustainability-related revenues and expenses is essential for compliance. • Transparency wins. Clear disclosures build trust, attract investments, and keep you ahead of regulations. • Talk to your stakeholders. Engaging with them ensures your reporting reflects real-world needs. • Stay adaptable. Standards are evolving, and keeping up is crucial for long-term resilience. PwC has turned a complex framework into actionable insights. Making it easier for organizations to navigate these changes. -------------------------------------------- So, how are you positioning your business to lead in sustainability reporting?

🌍 Taking Climate Action: Implementing 𝗜𝗦𝗢 𝟭𝟰𝟬𝟲𝟰-𝟭 for Transparent 𝗚𝗛𝗚 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 🌱 As organizations worldwide face increasing pressure to address climate change, understanding and managing greenhouse gas (GHG) emissions has never been more critical. ISO 14064-1 provides a robust framework for quantifying and reporting GHG emissions, helping organizations demonstrate their commitment to sustainability and transparency. Here’s a step-by-step guide to implementing ISO 14064-1 effectively: 1. Define the Purpose and Scope Why are you doing this? Whether it’s regulatory compliance, stakeholder communication, or internal carbon reduction goals, clarity on purpose is key. Set boundaries: Decide which parts of your organization to include and identify operational boundaries (Scope 1, 2, and 3 emissions). 2. Develop a GHG Inventory Plan Identify emissions sources: From fuel combustion to employee commuting, map out all activities contributing to GHG emissions. Choose methodologies: Select the right tools and emission factors to calculate your carbon footprint accurately. 3. Collect and Manage Data Gather activity data: Collect data on energy use, transportation, waste, and more. Ensure data quality: Accuracy and consistency are non-negotiable for credible reporting. 4. Calculate GHG Emissions Apply emission factors: Convert activity data into GHG emissions using standardized factors. Account for all scopes: Don’t forget Scope 3 emissions—they often represent the largest portion of your footprint! 5. Establish a GHG Inventory Management System Create policies and procedures: Build a system to manage your GHG data effectively. Train your team: Ensure everyone involved understands their role in the process. 6. Prepare the GHG Report Document your inventory: Summarize your findings and include all necessary details for transparency. Highlight key insights: Use the report to identify reduction opportunities and set actionable goals. 7. Conduct Internal Audits and Reviews Verify accuracy: Double-check your data and calculations to ensure compliance with ISO 14064-1. Address gaps: Correct any errors or inconsistencies before finalizing the report. 8. Seek External Verification (Optional but Recommended) Engage a third-party verifier: Independent verification adds credibility to your GHG report. Obtain a verification statement: This formal acknowledgment can boost stakeholder trust. 9. Communicate the Results Share your report: Publish your findings to demonstrate transparency and accountability. Use insights for action: Leverage the data to drive sustainability initiatives and engage stakeholders. 10. Continuously Improve Monitor progress: Track your performance against reduction targets. Stay updated: Keep up with evolving methodologies, regulations, and best practices. #Sustainability #ClimateAction #GHGEmissions #ISO14064 #CarbonFootprint #ESG #NetZero #GreenFuture