Sustainability reporting most sought-after skill in corporate finance departments, poll finds

This is the warning from Persefoni and the Financial Education & Research Foundation (FERF), following a poll of more than 50 chief accounting officers and controllers at listed firms in the US.

The US market was chosen for this study in recognition of the forthcoming climate disclosure mandates from the Securities and Exchange Commission (SEC).

The SEC is proposing to mandate standardised emissions disclosures across Scopes 1 (direct), 2 (power-related) and 3 (indirect) sources, with an initial focus on the largest firms for Scope 3 disclosures. Also on the table are mandatory corporate disclosures on climate risk, with the SEC warning that emissions goals or existing transition plans may not be sufficient. A finalised set of changes is expected in 2024.

Additionally, many US-based businesses have multinational work in the EU, which is implementing a new Corporate Sustainability Reporting Directive (CSRD) from January 2024.

To meet these new requirements, many businesses are seeking to combine financial disclosures and sustainability reports.

The survey from Persefoni and the FERF found that 50% of companies now have at least one financial professional working full-time on sustainability reporting. This, plus work to date on emissions measurement, means the bulk of companies (seven in 10) are already disclosing their Scope 1 and 2 emissions.

But this still leaves half of the businesses with no dedicated staff working on sustainability reporting with financial reporting experience.

This could present a particular challenge in regard to Scope 3 disclosures; only 15% of those polled said their business has started collecting data on indirect emissions across the value chain.

70% of those polled said their company has an “immediate” need to improve talent in relation to sustainability disclosures. 53% said their business is already upskilling members of the finance team to support climate reporting and a further 25% said they plan to in the coming year.

But additional hiring will doubtless also play a role. 48% of those polled said that, within the next 12 months, they will either contract consultants or hire one or more full-time employees to work on ESG disclosures.

When the survey respondents were asked to name the most in-demand skill for their future hiring, more than two-thirds (68%) cited ESG data collection and reporting. Regulatory landscape knowledge was also ranked highly.

Persefoni’s chief sustainability officer Kristina Wyatt said: “As we move from a voluntary to a regulated reporting environment, companies will need to focus on ensuring that the data they are reporting is sound and backed by appropriate procedures and controls so companies are able to show how they derived the information they are reporting to investors.

“Building strong internal controls over climate information will help ensure the information reported is complete and accurate. Companies will necessarily be much more focused on the integrity of their climate data as they move from disclosing in voluntary sustainability reports to SEC filings.”