PwC’s “Measuring year-over-year progress in SEC sustainability disclosures” presents the results of its analysis of: (i) 2022 Form 10-K to 2021 Form 10-K climate-related disclosures, and 2022 Form 10-K biodiversity disclosures, in the Business, Legal Proceedings, Risk Factors, and MD&A sections; and (ii) 2022 Form 10-K financial statement footnote climate- and environmental-related disclosures, among the S&P 100.
Among the key takeaways:
Existing disclosure requirements per SEC 2010 Guidance—As was the case in 2021, all companies included some climate-related Risk Factor disclosure, most commonly in conjunction with other risk topics. Also on par with 2021, more than one-quarter of companies disclosed pending climate-related litigation or other climate-related legal action in their Legal Proceedings section.
Climate-related targets & goals—42% of companies disclosed climate-related targets or goals in their 2022 Form 10-K. Of those, 29% disclosed targets relating to reductions in GHG emissions or energy; 12% disclosed targets relating to reductions in GHG emissions or energy or other climate goals; and one company disclosed targets related to other climate goals.
Financial statement footnotes—More than half of companies (55%) included financial statement footnote disclosure in their 2022 Form 10-K on climate or other environmental topics, with the single most prevalent topic being waste and hazardous materials, which was addressed by 76% of those companies.
Biodiversity—Referencing the application of existing SEC rules and a 2021 FASB paper (which we reported on here), the report notes that 14 companies included biodiversity-related disclosures in their 2022 Form 10-K, most commonly in the Risk Factors and Business sections.
In addition to the foregoing, among other noteworthy information, the report includes climate topic-specific disclosure prevalence year-over-year and by section of the Form 10-K; industry-specific data; and examples of climate, environmental, and biodiversity disclosures from 2022 Form 10-Ks.