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New SEC climate disclosure rules boost quality of investor information

New SEC climate disclosure rules boost quality of investor information

12 March, 2024
Americas Funds ESG reporting

The new SEC climate disclosure rules for public companies will enhance the quality of investor information and increase the global regulatory pressure for further action, Ocorian fund services and strategic partner Treety believe.

The US securities regulator has enacted a rule that for the first time will require disclosures on climate risks with the result that thousands of companies will have to report some greenhouse gas emissions as part of efforts to provide investors with more consistent, reliable and comparable climate disclosures.

Ocorian fund services and Treety, which are working together to address the increasing need for tailored ESG reporting driven by regulatory requirements and growing investor appetite for impactful capital deployment, say the implications of the new rule are profound across industries and for their clients.

Hatim Baheranwala, CEO at Treety, said: “The direction of financial regulation on ESG and climate related topics is clear. We can expect more formal reporting requirements, which will require quantification of positive and negative impacts and environmental and social sustainability risks, beyond the status quo of qualitative assessments, simple box checking exercises and storytelling.”

The SEC’s rule is already being challenged in the US Court of Appeals for the 11th circuit by a coalition of 10 US states including West Virginia, Georgia and South Carolina and has been watered down from previous SEC proposals which required more extensive disclosures.

However, Ocorian and Treety believe that despite the politicisation of the ESG debate views, the direction in most jurisdictions is towards greater mandated transparency to help financial markets identify organisations that are the biggest contributors to these issues.

Yegor Lanovenko, Co-Head of Fund Services at Ocorian, said: “The momentum is towards transparency and accountability in corporate governance and financial reporting from governments and regulators globally is clear.

“For our industry and clients, navigating this continuously evolving regulatory environment is crucial for successful fundraising, regulatory compliance, and stakeholder engagement. Private asset managers need a comprehensive yet flexible solution to collect and meaningfully analyse the data points needed for various frameworks and investor requirements

In partnership with Treety, a leading ESG SaaS solution specialising in private markets, Ocorian fund services offers a comprehensive suite of tools to its fund services clients, including customised dashboard and analytics, sustainability risk assessment mapping, SFDR annex and disclosure templates, and ESG/Impact data collection and approval flows.

The collaboration provides Ocorian's fund services clients with a flexible solution that aligns seamlessly with their specific fund type, asset class, and framework requirements while efficiently managing complexity at scale.

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About Ocorian fund services

Ocorian’s fund services team delivers operational excellence across fund administration, AIFM, depositary and accounting services to the world’s largest financial institutions along with dynamic start-up fund managers and boutique houses. It’s team of over 300 funds specialists work across all major asset classes of alternative investment funds such as private equity, real estate, infrastructure, debt and venture capital, whilst its specialist Islamic Finance team is a leading provider of Sharia-compliant investment structures.