Building climate compliance systems

🌍 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

California Climate Regulations are coming, yet guidance for companies in scope is slow to develop. FSI Consulting has put together a list of actions that companies can take today, that will prepare them for what will likely be a shortened runway for compliance. If you and your company are struggling with CA readiness and where to start, here are 5 no regret actions you can start taking towards compliance: 1- Engage with Key Stakeholders and Determine Overall Approach  Start by assembling a cross-functional team (Sustainability, Finance, Legal, Operations) to manage and support efforts. Work as a team to secure executive and Board-level buy-in while ensuring adequate resources and oversight. Investigate options to keep work in-house or engage with a consultant to calculate GHG emissions and/or prepare a climate risk report.   2- Start Compiling Climate Risk Data  Compile a list of potential physical risks (floods, fires, heat, etc.) to facilities, and research potential transition risks (carbon pricing, regulations, market changes, etc.) based on your organizational boundaries. Think about and identify internal climate risk governance activities and collect relevant metrics and targets for evaluating climate risk mitigation activities. Review peer companies’ climate risk reports in the public domain.   3- Evaluate GHG Emissions Inventory Reporting Readiness  Conduct an internal review of current GHG inventory processes (with future attestation in mind), assess data quality management systems and identify reporting gaps versus requirements.   4- Engage Third-Party Assurance Provider for GHG Emissions Inventory  Select and onboard a qualified verification body and get early feedback on data collection processes and controls.   5- Review Climate Strategy Documentation  Assess current climate commitments and targets, identify gaps in current documentation and create a clear paper trail for compliance purposes.

Compliance shouldn’t be a one-and-done project. It should be built like a product. Too many companies treat GRC as a static checklist—a box to check once a year. But in today’s world of constant risk, evolving threats, and changing regulations, that approach is outdated. Instead, GRC should follow agile principles just like product development: -Start small. Launch with the minimum viable compliance (MVC) framework. No need to overcomplicate things from day one. -Iterate often. Compliance needs constant refinement based on new risks and business changes. -Embed into workflows. Make compliance frictionless by integrating it into engineering and ops teams' daily work. -Measure and adapt. Treat policies like features—gather feedback, track adoption, and improve over time. The companies that embrace GRC as a product—not a project—will build stronger, more resilient compliance programs. Are you treating GRC like a living, evolving system or just another annual task? #GRC

Annual reporting season just ended. Did your compliance report reveal progress — or problems? If you found non-compliance, repeat violations, or near misses, the real question isn’t what happened — it’s what are you going to do about it? Too often, compliance issues get filed, not fixed. That’s a systems problem, not a people problem. Here are some of the warning signs and shifts to watch for: ✅ Compliance Requires Functioning Systems ↳ Policies don’t protect your organization—systems that work do. If it’s not written down, it’s not enforceable, auditable, or actionable. ✅ Compliance Programs Fail When They’re Too Far from the Work ↳ When compliance is siloed in Environmental, Health, and Safety (EHS) and disconnected from daily operations, frontline teams can’t see risks—or own them. ✅ Warning Signs Your Compliance System Has Gaps ↳ From buried metrics to unclear Standard Operating Procedures (SOPs), most compliance breakdowns stem from poor design, not lack of effort. ✅ In High-Performing Organizations, Compliance Is Operationalized ↳ They embed limits into SOPs and alarms, train field teams to spot risk, and review metrics alongside safety and quality. ✅ System Design Is the Foundation of Sustainable Compliance ↳ Environmental risk is built into risk reviews, alerts, task plans, and maintenance systems—built for consistency and control. ✅ Systems Support Action—But Leaders Set the Tone ↳ Leaders model what matters. They show up in the work, lead the reviews, and drive accountability. ✅ Environmental Compliance Isn’t a Report. It’s a System. ↳ Weak systems put your license to operate, your people, and your reputation at risk. Where do compliance systems fail most in your experience—SOPs, ownership, or visibility? Drop your thoughts below. 👇 Need help turning compliance into culture? Contact Morgan Davis, PMP, PROSCI, MBA Davis if your organization needs help systemizing your compliance program and driving operational results. ♻️ Reshare to encourage leaders in Operations, EHS, and Compliance to shift from reactive reporting to system-level improvement.

Most companies right now are investing a lot of time and money in accuracy. Clean data. Verified certificates. ESG dashboards with every checkbox ticked. That’s important — but it’s only half the battle. Because if that data isn’t actionable across the business, what’s the point? In our conversations with teams handling climate compliance, the pattern is the same: They’re buried in spreadsheets. They’ve got some third-party platforms. But when procurement wants to screen a supplier, or finance needs to evaluate climate risk, they’re still waiting on a PDF or someone to interpret a system they don’t have access to. This is the real bottleneck. Not just “do we have the data,” but: – Can the right person use it at the right time? – Is it structured enough to inform supplier selection, risk disclosures, or design decisions? – Can we connect sustainability goals with actual financial and operational levers? If the answer’s no — then all you’ve built is a reporting silo. And compliance will always feel like a burden. But if your data is structured, traceable, and accessible? Then, climate compliance becomes something else entirely: A decision-support system. A source of business intelligence. A catalyst for smarter choices. The shift we need isn’t from unverified to verified. It’s from buried to usable. That’s how we stop climate reporting from being a cost center — and start making it a competitive edge.

Climate Journey Roadmap 🌍 This diagram developed by KPMG provides a solid visual framework to guide companies through the process of aligning with climate disclosure requirements. It is central to ESRS E1, the European standard for climate-related reporting, and increasingly relevant as other jurisdictions adopt similar expectations. The framework outlines five connected phases that help translate climate ambition into structured actions and credible reporting. It begins with governance, ambition, and strategy, focusing on defining climate goals, assigning responsibilities, and linking performance incentives to sustainability outcomes. The second phase emphasizes identifying and assessing physical and transition risks through climate scenarios, helping businesses understand material impacts on strategy and operations. Transition planning focuses on quantifying emissions, evaluating mitigation strategies, and integrating tools like internal carbon pricing and offset mechanisms. Next comes defining concrete actions, allocating CapEx and OpEx, setting science-aligned targets, and creating an implementation roadmap. The final stage embeds climate across core business systems, processes, and reporting infrastructure to ensure long term integration. Beyond compliance, this roadmap helps businesses future-proof their operations and respond to increasing investor and stakeholder scrutiny. It enables companies to move from high-level commitments to measurable progress. It also provides internal clarity, helping align teams across departments and functions under a common direction. As regulatory momentum builds, this kind of structured approach is becoming essential to stay ahead, manage risks, and seize opportunities in the transition. #sustainability #sustainable #esg #climatechange

One common mistake and challenge associated with corporate carbon footprint measurement is the critical decision of how to set up your organizational structure? Establishing an organizational structure for carbon management is crucial—not just for compliance, but as the foundation for effective climate action. Here’s a breakdown of key best practices to keep your company on the right path: 1️⃣ Define Boundaries Thoughtfully   The first step in carbon management is choosing the right boundary approach (operational, financial, or equity) as outlined by the GHG Protocol. Most companies use Operational Control for simplicity and effectiveness, aligning emissions data directly with decision-making processes. 2️⃣ Prioritize Accountability and Insight   A well-designed structure supports: - Accountability: Assign responsibility for emissions to specific teams. - Data-Driven Decision-Making: Analyze emissions by business unit, facility, or region to identify hotspots. - Goal Setting: Establish baselines and KPIs, setting clear targets across levels. 3️⃣ Start Simple, Scale Gradually   Begin by reviewing your current org chart. Group emissions by practical categories (e.g., facilities, business units). As your data grows, refine the structure for greater granularity, which brings improved visibility without overwhelming your team. 4️⃣ Tailor for Practicality  Focus on physical locations that generate emissions—factories, warehouses, etc. Customizing your approach by industry (e.g., retail, manufacturing) ensures efficiency and clarity. Getting this right now will create a robust foundation for sustainable operations, ensuring your team is empowered to measure, manage, and reduce emissions effectively. 

Guidance on Climate Transition Plans under ESRS For organisations navigating climate reporting and sustainability compliance, the new guidance on implementing climate transition plans under the European Sustainability Reporting Standards (ESRS) provides valuable support! The guidance provides an approach for organisations to meet the ESRS requirements by detailing disclosure obligations that align with key EU regulations, such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy. This alignment helps ensure climate transition activities and sustainability disclosures meet broader European compliance standards, reinforcing their commitment to responsible and sustainable practices in line with EU legislation. 1️⃣ Purpose: Offers non-binding guidance to help organizations create effective transition plans for climate change mitigation. 2️⃣ Compliance: Maps out how ESRS aligns with EU laws like the Corporate Sustainability Due Diligence Directive (CSDDD) and EU Taxonomy, ensuring regulatory alignment 3️⃣ Structure: Covers all aspects of climate disclosure—from European frameworks and disclosure requirements to international standards 4️⃣ Paris Agreement Alignment: Organizations must disclose targets that align with the 1.5°C goal, showing commitment to global climate efforts 5️⃣ Decarbonization: Outlines required emissions reduction actions, including operational changes and product modifications. Organisations are required to outline specific actions, known as "decarbonization levers," which may include operational adjustments, product changes, and other emissions reduction initiatives 6️⃣ Investments: Specifies the need for transparent reporting on investments, including EU Taxonomy-aligned CapEx for sustainable projects 7️⃣ Disclosures: Companies involved in EU Taxonomy activities must show their alignment with taxonomy criteria for sustainable finance 8️⃣ Governance: Transition plans should be embedded within overall corporate strategy, backed by governance bodies to ensure alignment with broader goals 9️⃣ Progress: Regular updates on implementation are required, measuring action effectiveness toward emissions targets 🔟 IROs from climate change mitigation: The guidance stresses the need for organisations to assess and disclose social and environmental impacts, risks, and opportunities linked to their climate transition plans The guidance emphasises that climate transition plans should be fully embedded within a company's overarching strategy and be actively supported by governance bodies. This integration ensures that climate goals are not treated as standalone objectives but are interwoven with long-term corporate planning. By doing so, organisations can align their climate ambitions with their overall business objectives, securing strategic and governance-level commitment to climate action.

𝗖𝗮𝗹𝗶𝗳𝗼𝗿𝗻𝗶𝗮 𝗔𝗶𝗿 𝗥𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀 𝗕𝗼𝗮𝗿𝗱 (𝗖𝗔𝗥𝗕) 𝗵𝗮𝘃𝗲 𝗿𝗲𝗹𝗲𝗮𝘀𝗲𝗱 𝗮 𝗰𝗵𝗲𝗰𝗸𝗹𝗶𝘀𝘁 𝘁𝗼 𝘀𝘂𝗽𝗽𝗼𝗿𝘁 𝗰𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 𝗰𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲. Starting in 2026, many US companies doing business in California must biennially disclose their climate-related financial risks under Senate Bill 261. The California Air Resources Board (CARB) has now released a draft checklist to guide these disclosures. This new checklist helps companies prepare their first report, due on 𝗝𝗮𝗻𝘂𝗮𝗿𝘆 𝟭, 𝟮𝟬𝟮𝟲. The guidance is a baseline for disclosure. It is largely based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). 𝗧𝗛𝗘 𝗙𝗜𝗩𝗘 𝗣𝗢𝗜𝗡𝗧 𝗖𝗛𝗘𝗖𝗞𝗟𝗜𝗦𝗧 𝟭. 𝗣𝗶𝗰𝗸 𝗮 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 𝗙𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸 Select a framework for reporting climate-related risks and opportunities. Reports may follow TCFD or International Sustainability Standards Board (IFRS S2) or other governmental standards. A report should contain a statement on which reporting framework is being applied, and which recommendations and disclosures have been compiled. 𝟮. 𝗚𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 Disclosures should describe the organisation's governance structure for identifying, assessing, and managing climate-related financial risks. 𝟯. 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆 The report should describe the actual and potential impacts of climate-related risks and opportunities on a company's operations, strategy, and financial planning. 𝟰. 𝗥𝗶𝘀𝗸 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 The disclosures should describe how the reporting entity identifies, assesses, and manages climate-related risks and how those processes are integrated into the organisation's overall risk management. 𝟱. 𝗠𝗲𝘁𝗿𝗶𝗰𝘀 𝗮𝗻𝗱 𝗧𝗮𝗿𝗴𝗲𝘁𝘀 The report must disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities. 𝗠𝘆 𝗧𝗮𝗸𝗲 This checklist brings clarity to a complex mandate. It sets minimal expectations for companies navigating these new reporting requirements. Companies should not wait for the final rules to be published. They should proactively prepare for compliance by assembling a cross-functional team, identifying existing data, and assessing reporting gaps. Organisations should integrate climate-related risk management into their overall risk management framework. Viewing climate change with the same rigour as any other strategic risk is a forward-looking practice that will build resilience and support investor confidence. For support with meeting SB261 requirements, please get in touch. #ClimateRisk #Sustainability #ESG #CorporateGovernance #Regulation #California #Finance TCFD Source: https://lnkd.in/eWp5ERuX ___________ 𝘍𝘰𝘭𝘭𝘰𝘸 𝘮𝘦 𝘰𝘯 𝘓𝘪𝘯𝘬𝘦𝘥𝘐𝘯: Scott Kelly

CALIFORNIA UPDATE California’s SB 261 compliance countdown is underway. By January 1, 2026, thousands of U.S. companies doing business in California will need to publish biennial climate-related financial risk reports under SB 261. WHY THIS MATTERS Covered entities must assess their material climate-related financial risks and disclose how they’re managing them, using a framework aligned with the TCFD recommendations. As we help clients prepare, we’re focusing on four key steps: * Getting the right team in place, including legal, risk, finance, sustainability, and operations leaders who understand both disclosure obligations and enterprise risk * Assessing physical and transition risks tailored to the company's industry and operations * Benchmarking against peers to understand emerging norms in climate risk reporting and inform disclosure decisions * Organizing around the TCFD pillars - governance, strategy, risk management, and metrics and targets - to build a report that is both legally defensible and decision-useful Importantly, both SB 261 and the California Air Resources Board’s FAQs emphasize that CARB will consider a company’s good faith efforts to comply, including when those efforts were initiated. That makes prompt planning not just prudent, but strategic. Happy to share insights as the 2026 deadline approaches. Feel free to reach out. #CARB #SB261 #ClimateReporting