SEC reporting — So what?

“Are you ready to comply with SEC climate reporting requirements?” “Our firm can help you navigate the complex climate reporting rules.” 

The echo of hot agency takes is reverberating around social media and trade publications as PR and marketing pros jockey for business, hoping to capitalize as organizations scramble to comply with the latest rules from the Securities and Exchange Commission.   

Those are the wrong questions. Companies are ready. The majority already report and have an army of folks lined up to do it. Research from the Governance and Accountability Institute shows a record 98% of S&P 500 companies and 90% of Russell 1000 companies, including 82% of the smallest half of the Russell 1000, published ESG Reports in 2022, the latest year of their survey. 

These teams will spend even more time and money on reporting. The SEC itself estimates the rule will increase spending by filers on external service providers like assurance firms by as much as $907 million a year, an 18% increase over current levels.  

While compliance and robust reporting are a critical component of ESG and sustainability progress, reporting in and of itself will not meet all your communications needs. To be clear, this has been true for a long time. I have seen, read and worked on many CSR, sustainability and impact reports in my career and can truly appreciate the value that these documents and websites bring. They serve as a single source of truth for those stakeholders looking to dig into your sustainability work. They provide a platform for dialogue with interested stakeholders, particularly investors, who want to see progress.

But I have also seen many of them die on a shelf, or in a corner of the website, as internal sustainability leaders scratch their heads and wonder why no one pays attention. Organizations should take advantage of this investment of time and resources to not just sharpen reporting plans, but to also think through how this moment could spur a shift in how you communicate more broadly about environmental and social issues.   

There is a simple truth about the investment in reporting that organizations must make. Ready or not, you must comply with the regulations. Certain stakeholders will follow your compliance journey closely, such as investors, activists and a subset of employees. The additional information and insight will help them engage with you and improve ESG performance, which is a good thing overall. However, to most other stakeholders, especially consumers, your ESG reporting will continue to fall on deaf ears.   

No one has ever fallen in love with a brand because it complies with regulations or publishes a report. Not. One. Person.   

The real question is: how will you harness all the time, effort and money you put into compliance and reporting to craft a compelling narrative that works harder for your organization? How do you connect your impact and efforts to cultural moments in a way that resonates with your target audiences and makes sustainability and ESG progress personal, relatable and inspiring? How do you leverage select elements of your reporting to build more touchpoints with consumers, moments to drive brand loyalty and preference?  

This is where the magic happens. Now is the time for brands to use this moment to differentiate and to reconsider their approach to communicating about social and environmental issues. Spend this time building on your already substantial investment to engage the best storytellers you can find to mine through the data, explore your partnerships, pressure test your positioning and ultimately develop a communications strategy you can lean into. 

The result should be a communications strategy built with rigor yet agile enough to meet the needs of people and culture; that demonstrates action and impact; and that is rooted in the authenticity of your brand. 

More disclosure is overall a good thing that will strengthen stakeholder engagement. While companies make the additional investment needed to comply with new regulations, now is also the perfect time to take a holistic approach to your ESG and sustainability communications to ensure they work for your brand beyond a small stakeholder set.  

Leave compliance to the lawyers and assurance gurus. Communicators can turn this moment into a purpose-led brand building opportunity.  

Mark Allegrini is VP of purpose at Allison.