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30 November 2023 / Quick Take
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Copy LinkIn 2022, S&P 500 companies’ greenhouse gas (GHG) emissions increased by only 3%, a significant contrast to the 32% increase seen in Russell 3000 companies. This indicates that larger companies are more effectively addressing a key element of climate change.
The next frontier for GHG reductions will be Scope 3 emissions, the GHG emissions that occur indirectly due to a company's activities but are beyond their direct control, such as emissions originating from their supply chain. All the major emerging regulatory disclosure regimes focus on Scope 3 emissions—albeit in different ways. These frameworks include the European Union’s Corporate Sustainability Reporting Directive (CSRD), the accompanying European Sustainability Reporting Standards, the California's Climate Corporate Data Accountability Act, and the US Security and Exchange Commission (SEC) Proposed Rules on Climate-Related Disclosures.
Currently, 74% of the S&P 500 and 43% of the Russell 3000 disclose Scope 3 emissions. Given the increased scrutiny that will accompany increased disclosure, companies should consider how to combine conversations with upstream suppliers and downstream customers about 1) the level of Scope 3 emissions and 2) ways to incentivize suppliers and customers to decarbonize.
For more information on climate reporting, see Large US Firms Make Meaningful Progress on GHG Emissions. And for more data on environmental and other ESG disclosures, please visit our Live Dashboards on ESG Advantage, powered by ESGAUGE.
In 2022, S&P 500 companies’ greenhouse gas (GHG) emissions increased by only 3%, a significant contrast to the 32% increase seen in Russell 3000 companies. This indicates that larger companies are more effectively addressing a key element of climate change.
The next frontier for GHG reductions will be Scope 3 emissions, the GHG emissions that occur indirectly due to a company's activities but are beyond their direct control, such as emissions originating from their supply chain. All the major emerging regulatory disclosure regimes focus on Scope 3 emissions—albeit in different ways. These frameworks include the European Union’s Corporate Sustainability Reporting Directive (CSRD), the accompanying European Sustainability Reporting Standards, the California's Climate Corporate Data Accountability Act, and the US Security and Exchange Commission (SEC) Proposed Rules on Climate-Related Disclosures.
Currently, 74% of the S&P 500 and 43% of the Russell 3000 disclose Scope 3 emissions. Given the increased scrutiny that will accompany increased disclosure, companies should consider how to combine conversations with upstream suppliers and downstream customers about 1) the level of Scope 3 emissions and 2) ways to incentivize suppliers and customers to decarbonize.
For more information on climate reporting, see Large US Firms Make Meaningful Progress on GHG Emissions. And for more data on environmental and other ESG disclosures, please visit our Live Dashboards on ESG Advantage, powered by ESGAUGE.
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Former Senior Researcher, ESG Center
The Conference Board
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