What the SEC’s new climate transparency rules mean for you

The opinions expressed by Entrepreneur contributors are their own.

Discussing sensitive topics can be difficult for entrepreneurs. This is one of the top three or four reasons I get the first requests for public relations assistance to address a hot-button issue. The latest confusing trend is about sustainability and how to talk about it openly. Surprisingly, people need clarification on how much to talk about, why it’s important, and when to bring it up. There’s even a new word for this fear: “greenhushing.”

The most recent pressure on companies regarding eco-messaging involves recent efforts by the U.S. Securities and Exchange Commission (SEC) to enforce regulations that protect investors and maintain market integrity. Crucially, the SEC revised rules on environmental transparency and introduced mandatory climate risk disclosures for public companies.

This is the first time a sustainability mandate has emerged at a national level and is expected to have a major impact. In my opinion, even for private companies, it is an invitation to pay attention and stop neglecting this issue.

We are entering an era where climate objectives, targets and governance frameworks will become mandatory in corporate reporting. This shift also aligns with growing consumer demand for environmentally and ethically sustainable products, a trend which, despite its popularity, has seen many companies struggle to translate into tangible demand.

Related: Sustainability for Entrepreneurs: Why It Matters (& How to Get It).

The paradox of consumer demand and greenwashing

Consumer enthusiasm for sustainable products often contrasts starkly with their actual purchasing behavior. While surveys indicate a strong desire for sustainability, sales often have to keep up with expectations for new environmentally conscious products. This discrepancy is exacerbated by greenwashing – where environmental stewardship claims are not supported by practice – further eroding consumer trust and complicating the landscape for genuine initiatives.

Today I would advise any company to prepare for sustainability discussions and engagement. It is now an unavoidable topic. Because I have been a fractional CMO and external public relations consultant since 2002, I have received many calls from companies facing these watershed moments. Here’s the advice I would give to a leadership team aiming to be more vocal about sustainability.

The imperative of transparency

In this context, the need for transparency is undeniable. Beyond mere regulatory compliance, transparency is critical to cultivating consumer trust and loyalty. Companies must now proactively measure and refine their approaches to climate change, so this journey must begin with a comprehensive understanding of their environmental footprint, including greenhouse gas emissions, resource use and waste generation.

Typically facilitated by external consultants or an internal sustainability team, this key assessment is critical to establishing realistic sustainability goals and improvement strategies. Using standardized tools and frameworks such as the Greenhouse Gas Protocol and Life Cycle Assessment provides a methodical approach to this task and will result in data and benchmarks that you can use consistently in your messaging.

With this data, you can set specific, time-bound goals that meet compliance requirements (if necessary) and drive significant environmental and social improvements. Involving stakeholders, particularly employees, at this stage helps surface any practical concerns and integrate these insights into the goal-setting process.

Related: 70% of consumers say they will buy “green” products, but only 5% actually do. This is due to a common marketing mistake by eco brands.

The role of public relations in implementation

Public relations in sustainable messaging goes beyond simply issuing press releases. PR is a strategic tool to amplify and embed climate change initiatives into corporate ethics. Compelling storytelling that highlights a company’s progress and sustainability impacts can significantly boost its reputation and foster third-party credibility.

Leveraging various channels, from press releases and social media to comprehensive sustainability reports, allows these stories to reach and resonate with broad audiences, driving engagement and advancing the sustainability agenda.

Cultivating a culture focused on sustainability internally is essential. Companies can ensure that sustainability principles are deeply ingrained in every aspect of their operation through regular training programs, active participation in sustainability initiatives and recognition of individual and team contributions. This not only strengthens the company’s commitment to sustainability among employees, but also mobilizes them and other stakeholders as ambassadors of these values.

Continuous monitoring and evaluation of sustainability initiatives and how they are perceived by the public are vital measurement points to consider when evaluating progress. Like any significant initiative, setting and monitoring key performance indicators (KPIs) allow companies to measure effectiveness and identify areas for improvement. Additionally, engaging employees and stakeholders through feedback will enrich this process and provide real-world insights.

It seems counterintuitive, but in my experience challenge is often paired with opportunity. Tackling difficult topics can uncover opportunities for innovation, stakeholder engagement and corporate responsibility that might otherwise have remained dormant. Talking specifically about sustainability does not always mean compliance. It’s an opportunity to attract buyers and lead the market with integrity, innovation and vision.

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