What do new global environmental regulations mean for businesses?

factory polluting environment

The severity of the environmental emergency we are currently facing cannot be understated, necessitating a business sustainability strategy that aligns with global environmental regulations. Climate action cannot be delayed. Under the 2015 Paris Agreement, we must work to keep global warming ‘well below 2 degrees Celsius’ and further our efforts to limit it to 1.5 degrees Celsius. However, limiting global warming to 1.5 degrees Celcius will require us to drastically reduce worldwide emissions and reach net zero by the middle of the century at the very latest. 

With all of this in mind, governments, businesses, and individuals have significant roles to play in mitigating the climate crisis. Urgency is very much the theme of many developments at the moment in the climate space, including the arrival of SEC climate disclosures to empower businesses to prioritise ESG data strategy planning. Additionally, we can expect more regulations to be implemented given the tight timeline we have to save the planet. Keep reading to learn what new global environmental regulations mean for businesses, big and small, in the fight against climate change. 

What are the global environmental regulations? 

The urgency to act on climate change is currently being felt by governments, individuals, communities, and companies. Businesses face a new urgency regarding how to appropriately manage climate-related data from their supply chains. The U.S. Securities and Exchange Commission (SEC) announced plans last March to standardise and improve climate-related disclosures for investors.

The aim behind the new regulations is to increase awareness of the vital environmental, social, and governance (ESG) issues public businesses are facing to get them to prioritise action in these areas. SEC’s new disclosure rules will request listed businesses to disclose risks that are likely to have a material impact on their business, financial condition, or results of operations. 

They will also require companies to disclose information concerning their direct greenhouse gas emissions (Scope 1), indirect emissions from purchased electricity or other kinds of energy (Scope 2), and specific kinds of greenhouse gas emissions that come from downstream and upstream activities within the company’s value chain (Scope 3).

How will these regulations affect businesses? 

Due to debates surrounding certain aspects of the proposal SEC published, including Scope 3 disclosures, the timeline for the final rules has been pushed back. In saying that, since most investors support the core tenets of the latest disclosure rules, most expect this year will see the rules finalised and the implemented process started. 

ESG experts have said, in preparation for when the rules are finalised, that there are several steps businesses should be taking currently to ensure their data warehouses are organised, and are reporting accurate figures. The arrival of new global environmental regulations should be treated as a positive action, helping us to achieve our climate goals. 

The implementation of a wide range of environmental regulations has significantly enhanced water and air quality, reduced airborne particulates, improved the health of those residing in developing countries, and enabled tremendous reductions in greenhouse gas emissions, which have big advantages from preventing some of climate change’s worst impacts and preventing it. 


There’s no doubt that climate change is an urgent issue we must act on. The majority of forward-thinking businesses are not solely relying on technology to become more sustainable. Rather, they are looking to ESG data which can be considered a larger strategy, which includes technology and a framework for how to utilise the technology and team members to ensure the ESG data framework is being adhered to. 
A final draft of the SEC regulations could be on its way soon, which is why businesses need to prepare by starting to tackle their ESG data strategy now. Our expert-led corporate sustainability certification allow you to start your sustainability journey today and gain the necessary knowledge to effectively disclose and report on your climate impact.

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