SEC Climate Disclosure Bootcamp

Grant Harrison
GreenBiz Group
Kristen Sullivan
Deloitte & Touche LLP
Dave Stangis
Apollo Global
Management Inc.
SEC Climate Panel
Kristina Wyatt
Persefoni
Copyright © 2023 Deloitte Development LLC. All rights reserved.

Lee Ballin
Audit & Assurance
Managing Director,
leeballin@deloitte.com
+1 201-725-0721
Evan Harvey
Audit & Assurance
Managing Director,
evharvey@deloitte.com
+1 703-350-8799
Kate Wiese
Audit & Assurance
Senior Manager,
kwiese@deloitte.com
+1 908-310-6315
SEC Climate Bootcamp
Stefan Jimenez
Audit & Assurance
Senior Manager,
stefanjimenez@deloitte.com
+1 347-563-3204
Briana D’Agati
Audit & Assurance
Senior Manager,
bdagati@deloitte.com
+1 732-354-8213

Panel Discussion Debrief
What surprised you?
What are you most excited about?
What do you hope to get out of this bootcamp?

Today’s Objectives
1
Understand challenges associated with the
proposed SEC Climate disclosure rule and
how others have begun to solve them
2
Reassess your team currently involved in
ESG reporting and consider who else may
need to be involved
3
Recognize Deloitte’s perspectives relative to
the proposed SEC Climate disclosure rule
based on our recent experiences

Poll

The ESG Landscape

7
Environmental, Social, Governance (ESG) is framed as the universe of topics that reflect areas of performance management around
impacts and dependencies of the business on society and the environment.
The ESG Landscape
• Product design and lifecycle management
• Business model resilience
• Materials sourcing and efficiency
• Supply chain management
• Physical impacts of climate change
• Greenhouse gas (GHG) emissions
• Air quality
• Energy management
• Water and waste management
• Waste and hazardous materials management
• Ecological impacts
Business
model
and innovation
Social
capital
Leadership
and
governance
Environment
Human
capital
Source: SASB Materiality Map
• Human rights and community relations
• Customer privacy
• Data security
• Access and affordability
• Product quality and safety
• Customer welfare
• Selling practices and product labelling
• Labor practices
• Employee health and safety
• Employee engagement, diversity, and
inclusion
• Business ethics
• Competitive behavior
• Management of the legal and regulatory
environment
• Critical incident risk management
• Systemic risk management
Environment
Social capital
Business model & innovation
Leadership & governance
Human capital Included within ESG are climate-related matters that could lead
to potential impacts on an entity’s financial statements from
physical and transition risks or opportunities.*
Inventory Goodwill, Intangibles
Property, Plant,
Equipment
Loss and Gain
Contingencies
Climate Change
Commitments
Income Taxes
Going Concern
Financial
Instruments
Risk and Uncertainty
Disclosures
*For additional information, see the IASB Educational Material Effects of climate-
related matters on financial statements and Deloitte’s Closer Look Investor demand
for corporate reporting in line with the Paris Agreement on Climate Change.

Environmental, Social, and Governance (ESG) Landscape Overview
Copyright © 2023 Deloitte Development LLC. All rights reserved. 8
Rapid pace of change: Shift from voluntary to authoritative ESG and climate disclosure
Drivers of ESG Acceleration
• ISSB1 published exposure drafts for ‘Climate-related Disclosures’ and ‘General Requirements for
Disclosure of Sustainability-related Financial Information’; comment period closed on 7/29/2022
• ISSB confirms Scope 3 GHG emissions disclosure requirements will be included in upcoming
standards and announces guidance and reliefs to support the requirements
• ISSB describes “sustainability” and announces plans to advance work on natural ecosystems
and just transition
• Voluntary ESG standards and frameworks include the GHG Protocol2, TCFD3, SASB4, and GRI5
• $35 trillion in global ESG assets under management
• 82% of asset managers incorporate ESG in their investment assessments
• 41% of companies’ credit ratings have been influenced by ESG considerations
• 43 anti-ESG shareholder proposals fail to garner support, receiving only 7% support on
average (tracked from January to June 2022)
• 4,000+ companies are working with the Science Based Targets initiative (SBTi) to reduce emissions
in line with climate science
• 89% of public companies say they are enhancing internal goal setting and accountability mechanisms
to promote readiness for more sustainability disclosure requirements
01
02
03
04
Standard-setters
Regulators
Investors
Corporations
Accountable to ambitious commitments
and providing enhanced climate-related
and other ESG disclosures
Accelerating action and
transparency around the
financial impacts of climate and
ESG
Rulemaking around required
climate-related and other ESG
disclosures
Accelerating acceptance of
authoritative climate-related and ESG
standard-setters and a common
baseline
1. International Sustainability Standards Board (ISSB)
2. Greenhouse Gas Protocol (GHG Protocol)
3. Task Force on Climate-related Financial Disclosure (TCFD)
4. Sustainability Accounting Standards Board (SASB)
5. Global Reporting Initiative (GRI)
6. Corporate Sustainability Reporting Directive (CSRD)
7. European Financial Reporting Advisory Group (EFRAG)
8. European Sustainability Reporting Standards (ESRS)
• US SEC proposed disclosure rules on Cybersecurity and Climate Change in March 2022;
comment periods closed on 5/9/22 & 6/17/22, respectively, but reopened on 10/7/22 for 14 days due to
a technological error which may impact rulemaking finalization timeline
• US SEC released proposals to regulate the names of ESG investment funds and enhance
disclosures for ESG investment funds; comment periods closed on 8/16/2022
• EU CSRD6 adopted in November 2022, mandating ESG and climate disclosures for EU-listed and
US-based companies listed on EU regulated markets. EFRAG7 approved 12 draft ESRS8 to be
submitted to the European Parliament for adoption in 2023

9
SEC Proposal: Enhancement
and Standardization of
Climate-Related Disclosures

11
1. 2022 Deloitte CxO Sustainability Report. Deloitte. 2022.
2. ESG Reporting and Attestation: A Roadmap for Audit Practitioners CAQ. 2021.
3. The Enhancement and Standardization of Climate-Related Disclosures for Investors. SEC. March 21, 2022.
Today…
• Oversight of ESG is often not clearly established
or defined, though governance and organizational
capacity are critical to managing climate-related
efforts.1
• Timeliness for data collection and reporting
typically extend beyond current 10-K filing deadlines.2
• Data processes and controls over climate-related
information are generally not as mature as financial
reporting processes and controls.1
• Climate-related disclosure is voluntary.
Companies use a variety of sustainability reporting
frameworks and standards, and disclosure outlets.2
• Assurance—an avenue to quality, accurate, and
reliable disclosure—is currently not required.1
Under the proposed rule, registrants
would be required to disclose3…
1. Governance of climate-related risks, how identified climate-related
risks have or are likely to have a material impact on a company’s
strategy, business model, outlook over short-, medium-, or long-term,
and risk management processes.
2. Climate-related financial statement metrics (e.g., disaggregated
climate impacts on financial statement line items) and impact of
climate-related physical events and transition activities on
estimates and assumptions.
3. Greenhouse gas (GHG) emissions, including Scope 1 and 2 (and
Scope 3 phased in if material or if registrant has Scope 3 target).
4. Information about climate-related targets and transition plans.
Obtain reasonable assurance, phased in for accelerated and large
accelerated filers over certain GHG emissions disclosures; limited
assurance precedes.
Call to Action: What this means for your organization
SEC Proposal: Enhancement and Standardization of Climate-related Disclosures

SEC Proposes Standards on Climate Disclosures
The key components of the proposed climate disclosure requirements are:
• How the registrant’s board of directors and
management oversee climate-related risks, the
risk management process and the registrant’s
response
Governance Disclosures
• Processes for detecting, evaluating and
managing climate-related risks and the material
financial impact, as well as impact on strategy,
business model and outlook
• Internal carbon price (if used)
• Description of scenario analyses, assumptions
and projected impacts
• Climate transition plan & metrics (if adopted)
• Scope of activities, time horizon and any interim
targets for publicly disclosed climate-related
targets
• Plan to achieve target and yearly update
• How much carbon offsets have been used to
achieve climate-related targets
Qualitative Disclosures
• Gross and relative to intensity Scope 1 and 2
GHG emissions, separately disclosed on a
disaggregated (by GHG) and aggregated basis
• Subject to limited assurance during phase-in
period, followed by reasonable assurance
• Gross and relative to intensity Scope 3 GHG
emissions if the registrant has set a GHG
emissions target that includes Scope 3 emissions
or if Scope 3 emissions are material.
• Subject to securities law safe harbor
provisions
GHG Emission Disclosures
• Impact on FSLIs related to severe weather
events and other natural conditions and
transition activities if such events exceed 1% of
line item
• Expenditures related to mitigating the risk of
severe weather events, other natural conditions
and transition activities
• How severe weather events, other natural
conditions and transition activities affected
estimates and assumptions
• Subject to existing financial statement audit
requirements
Financial Statement Footnote
Disclosures
2022 2023 2024 2025 2026 2027
Large Accelerated
Filers Reasonable
Assurance
All disclosures
excl. Scope 3 for
Large Accelerated
Filers
Proposal
Release
60-day Comment
Period
Required in financial statement
footnote disclosures
Required in a newly created section of Form 10-K (Item 6) immediately before MD&A
All disclosures for
Large Accelerated
Filers with Limited
Assurance

Financial Statements Outside the Financial Statements
Disclosure Required
For climate-related events and transition activities:
(1) financial impact metrics
(2) expenditure metrics
(3) discussion of the impact on financial estimates and
assumptions
• GHG emission disclosures for Scopes 1, 2 and 3
• Climate governance
• Climate-related risks and opportunities
• Climate risk management
• Climate targets and goals
Controls and procedures Subject to internal control over financial reporting Subject to disclosure controls and procedures
Attestation Part of financial statement & ICFR audit
Phase-in to reasonable assurance over Scope 1 & 2 GHG emission disclosures for
large accelerated and accelerated filers
Timeline for Proposed Climate Rule* (Illustrative timeline for calendar year end filers)
2021 Report
(filed in 2022)
2022
(filed in 2023)
2023
(filed in 2024)
2024
(filed in 2025)
2025
(filed in 2026)
2026
(filed in 2027)
2027
(filed in 2028)
Large accelerated filers with
reasonable assurance on
Scope 1 and 2 GHG emissions
All disclosures excl.
Scope 3 for large
accelerated filers
Proposal
release
60-day comment period
(concluded); Comment
period reopened Oct. 7,
2022 for 14 days, due to a
technological error
All disclosures for large
accelerated filers with
limited assurance on Scope
1 and 2 GHG emissions
Scope 3 for
accelerated filers
All disclosures for
accelerated filers with
limited assurance on Scope
1 and 2 GHG emissions
Accelerated Filers with
reasonable assurance on
Scope 1 and 2 GHG
emissions
scope 3 for
nonaccelerated filers
All disclosures for
nonaccelerated
filers
Scope 3 for smaller
reporting companies
Proposed disclosure location and timeline
SEC Proposal: Enhancement and Standardization of Climate-Related Disclosures
*Given the reopening of the comment period, the implementation timeline may be impacted. These dates are subject to change when the SEC issues the final rule, currently set for April 2023.

14
Climate-Related Governance
Incorporate climate-disclosure
considerations into data management
policies and procedures
Clearly define data owners’
roles, responsibilities, and
competencies
Establish board oversight & top-down
accountability mechanisms to support
robust control environment
Build organization capacity and train
Board and Management
• Evaluate maturity of existing controls to
enhance data accuracy and completeness
• Define internal process controls and
general IT controls (GITCs) to mitigate
identified climate-related risks
• Document methodologies for data
collection, measurement and/or
estimation (i.e., disparate data sources,
varying units, conversion factors, etc.)
2. Assess disclosure risks 3. Identify controls 4. Evaluate effectiveness
1. Define disclosure objectives
• Establish, document and communicate
internal and external climate-related data
timelines, aligned with financial reporting
• Review current-state of processes and
controls around existing climate disclosure
• Understand existing quantitative and
qualitative data governance structures, to
identify gaps and meet near- and long-
term reporting requirements
• Identify potential risks that could impact
climate-related reporting objectives
• Determine relevant data sources, systems
and process owners
• Document end-to-end climate processes
through narratives and flowcharts
• Identify and document data and IT system
limitations, assumptions and estimates
• Regularly assess design, implementation,
and operating effectiveness of controls
• Remediate control gaps and deficiencies
timely and implement ongoing process
improvements
• Integrate controls over climate disclosure
into enterprise risk management
processes and Internal Audit plans
• Engage with external assurance provider
The SEC proposed rule calls for disclosure of GHG emissions, Scope 1 and 2 (and Scope 3 phased in if material or if registrant has Scope 3 target), as well as
certain financial statement disclosures, and qualitative and governance disclosures. The Scope 1 and Scope 2 GHG emission disclosures would be subject to
limited assurance during a phase-in period, followed by reasonable assurance.
Internal Controls over Climate-Related Data
A Deeper Look: Governance and Controls considerations for Climate-Related Data

15
• GHG information to
be disclosed:
• Disaggregated by each
greenhouse gas
• In the aggregate
• Gross, excluding offsets
• Intensity (per $ revenue and
per economic unit)
• Methodology (e.g.,
approach, assumptions)
• Safe harbor for Scope 3 GHG
emissions disclosures
• No attestation requirement
• Voluntary GHG reporting
compared to reporting in
financial filings –differences
that impact materiality:
• Users of the disclosures
• Disclosure requirements
• Scope 3 GHG emissions
disclosure is required:
• If material
• If registrant has set a GHG
reduction target
• GHG Protocol: Company may
apply; 1) equity share or a 2)
control approach
• SEC proposed rule:
• Boundary must be
consistent with
consolidated financial
statements
• Registrants already
reporting under GHG
Protocol will need to revise
boundary to align with
financial statements
• Scope 1 and 2 GHG emissions
subject to limited assurance
(phase-in period), followed by
reasonable assurance.
• Requirements for attestation
are consistent with the
standards issued by the
AICPA, PCAOB, and IAASB.
Assurance
Organizational Boundary
Materiality Scope 3 GHG emissions
Considerations for disclosures outside the financial statements

16
Financial Impact Metrics Expenditure Metrics
Financial
Statement
Line Item
Climate-Related Events Transition Activities
Positive
Impact
Negative
Impact
Positive
Impact
Negative
Impact
Cost of Sales
$X $X $X $X
Expenditures Climate-Related Events Transition Activities
Expensed $X $X
Capitalized
$X $X
Separate disclosure for
each line item of (1)
negative impacts and (2)
positive impacts related
to:
- Climate-related
events
- Transition activities
1% disclosure
threshold for
each line item
using absolute
value of impacts
Separate disclosure of
(1) total amount
expensed and (2) total
amount capitalized
related to:
- Climate-related
events
- Transition activities
1% disclosure
threshold for each
of total amount
expensed & total
amount
capitalized
Illustrative disclosure: Illustrative disclosure:
Financial statement disclosure

17
Illustrative actions and timeline for Large Accelerated Filers (calendar year-end)
Preparing for the SEC Proposed Climate Rule Reporting Process
Begin where
you are, with
what you have
Understand SEC
requirements and
timeline implications
Perform
disclosure gap
analysis
Understand disclosure
gaps, and develop
strategy to address
Understand
your control
environment
Formalize and
document existing
controls over climate
information
Remediate
disclosure and
control gaps
Implement changes to
fill climate disclosure
and control gaps
Develop
disclosures
Leverage gap analysis
and remediation
actions to develop
draft and final
disclosures
Obtain
assurance
Q1 2024: Audit of
climate metrics
Q1 2025: Limited
assurance of
Scope 1 & 2 GHG
SEC proposed rule disclosures, excl. Scope 3
and audit and ICFR over climate-related
metrics in financial statements for Large
Accelerated Filers
2022 2023 2024+
Assess data processes, controls, and readiness to obtain assurance
Assess and enhance data processes and controls environment

18
ESG Challenges &
Opportunities Discussion

Anticipated Challenges
Data
Data entry may be happening manually by 100s of personnel
globally, making auditability difficult. Technology
Technology should accept automated data entry and deliver
accurate reports to reduce burden on personnel. When
technology is not integrated with EPR systems, it may be
difficult to tie ESG data to financials.
Timeline to adoption
It can be a challenge to anticipate the data gaps. Timeline
from planning to operation varies due to the size and
complexity of a Company’s organization. Resources
The proposed SEC Climate Rule will likely encompass multiple
stakeholders (e.g., legal, risk, controllership). Organizations
will need to have the right people at the table.
Internal control considerations
Increased reporting requirements will necessitate internal
controls over areas and systems not generally in the scope
of SOX. Other operational challenges
The current lack of clarity on the new rule may result in
application of judgment and estimation. Organizations who
are decentralized in nature will need to think about how they
will manage data with the level of auditability required.
Timeline to prepare climate-related disclosures will need to
align with the Form 10-K reporting timeline.

SEC Rule challenges and opportunities exercise
GHG Emissions
Data Gathering
Scope 3 Ambiguity
Control Environment
Data Validity
Transparency
Track Progress
Commitment to Decarbonization
Stakeholder Engagement
Potential
Challenges
Potential
Opportunities

21
Proposed SEC Rule:
Potential Challenges &
Opportunities Exercise

Proposed SEC Rule potential challenges and opportunities exercise
Within your table, you will be assigned a discussion topic and
will have 7 minutes to create a potential challenges and
opportunities chart for that topic. After 7 minutes, you will
pick a second topic and will complete the exercise once
more.
You will have 14 minutes to complete the exercise.
Group exercise (14 min)
Instructions
Debrief and Group Discussion
Once complete, discuss the following with your group;
Please be ready to share highlights from your discussion.
Discussion Topics
Climate Risk Management & Governance
Climate Targets & Goals
GHG Emissions
Climate-related Risks & Opportunities
Climate-related Financial Statement
Metrics & Disclosure

23
Application of proposed climate-related disclosures
Climate targets & goals
Disclosure of company climate targets and goals,
including:
 Timelines
 Plans to achieve targets or goals
 Progress towards meeting goals
 Internal carbon pricing & associated disclosures
 Carbon offset and renewable energy credit
considerations
Climate risk management & governance
Processes for identifying, assessing, and managing
climate-related risks, including:
 Whether there is system integration
 Likelihood of material impact on the business and
consolidated financial statements
 Effects on strategy, business model, and outlook
Oversight and governance of climate-related risks and
strategy by board of directors and management,
including:
 Significant climate-related events
 Scenario analysis/modifications
 Climate risks and transition plans
1
2
Climate-related financial statement metrics & disclosures
Disclose the financial statement impacts of:
• Climate-related events, including severe weather events and other natural conditions
• Transition activities, including efforts to reduce GHG emissions or otherwise mitigate exposure to transition risks
For both climate-related events and transition activities, the disclosures would include financial impact metrics,
expenditure metrics, and a discussion of the impact on financial estimates and assumptions.
5
Climate-related risks &
opportunities
Disclose how any climate-related risks identified
have had or are likely to:
• Have a material impact on business and
consolidated financials, which may manifest
over the short-, medium-, or long-term
• Affect strategy, business model, and outlook
Risks include Physical risks & Transition risks.
If using an internal carbon price, disclose inputs,
anticipated price changes, rationale for how price
is determined, and how price is used to assess
and manage climate-related risks.
If using a scenario analysis, include detail
around the parameters, assumptions, analytical
choices, and projected principal financial impacts.
4
GHG Emissions
Scope 1 and Scope 2:
• Related to a registrant’s owned or controlled
operations (direct and indirect emissions)
• Disclosures must include assumptions, data sourced,
and calculation methodologies
Subject to attestation over a phase-in period of 1-3 years
depending on the issuer filing status.
Scope 3
• Related to a company’s indirect up and downstream
value chains
• Disclosures required when:
• Considered material, or
• If Scope 3 emissions are included in GHG reduction
targets
No requirement for attestation, and companies will have a
safe harbor for liability. Smaller companies are exempt.
3
Sources: https://www.sec.gov/files/33-11042-fact-sheet.pdf

24
Potential Challenges and
Opportunities Debrief

Debrief Questions
1
What are some challenges you anticipate
related to any of the five topics?
2
How has your company approached some
of these challenges?
3
How are these challenges likely to affect
you? What are the implications for your
business and role?

26
Break
5 minutes

27
Teaming for ESG Reporting

Insights from Deloitte’s Sustainability Action Report survey, to consider for ESG disclosure and preparedness
2022 Deloitte Sustainability Action Report
Companies continue to face
challenges with data accuracy and
availability
• 35% list ensuring quality as the top
data challenge; another 25% cite
access to and quality of ESG data
as the greatest challenge
• 61% are prepared to disclose Scope
1 emissions, 76% Scope 2
emissions (up from 58% and 47%,
respectively, last year), however,
just 37% of respondents stated
they are prepared for Scope 3
emissions reporting
Companies are proactively
implementing changes to accelerate
disclosure readiness
• 81% report that new roles and
responsibilities have been created
to accommodate additional
disclosure requirements
• 99% expressed willingness to invest
in new technologies and tools to
meet stakeholder expectations and
future regulatory requirements
o Nearly half say they are very
likely (47%) or somewhat likely
(52%) to make these
investments in the next 12
months
Companies are beginning to shift from
commitment to action to address
evolving stakeholder expectations
• 57% of survey respondents have
already implemented a cross-
functional ESG working group to
drive strategic attention to ESG
topics; another 42% are in the
process of establishing one
• Companies are taking steps to
enhance internal governance and
control environments to prepare for
disclosures by implementing new
systems (45%), new controls (37%)
and hiring new staff (40%)
1 2 3
28

Companies are beginning to shift from commitment to action to address
• 57% of survey respondents have already implemented a cross-functional ESG
working group to drive strategic attention to ESG topics; another 42% are in
the process of establishing one
• Companies are taking steps to enhance internal governance and control
environments to prepare for disclosures by implementing new systems
(45%), new controls (37%) and hiring new staff (40%)
29
1

Assembling a Team
Planning for near-term compliance and
potential future enhancements or
requirements
Errors in practice may guide areas of focus
Understanding where others have been
challenged allows you to avoid similar issues
Formalizing responsibilities within the
organization
A steering committee or similar may help guide
and enforce roles and responsibilities
The overlay of governance strategy
What role will the board and senior management
take?
Spectrum of cross-functional talent
Broad range of competencies within the global
organization
The multitude of external constituencies
• Parties influencing your business objectives and
disclosures
• Parties assisting you in the quality journey

31
Strengthening governance and internal controls in ESG measurement and disclosure
Assembling a Team
Environment
Social Capital
Human Capital
Business
Model &
Innovation
Leadership &
Governance
Governance
Benchmarking
and roadmap
development
Internal audit
and external
assurance
Target
setting and
alignment with
business goals
Assess ESG
materiality
and Key
Performance
Indicator (KPI)
determination
ESG integration
into enterprise
risk and strategy
Standalone
disclosure
and/or
financial filing
Data and process management (critical role for finance to partner with business owners)
Internal controls (critical role for finance to partner with business owners)
Chief Sustainability Officer
ESG disclosure strategy
Standalone
disclosure
(ESG report, website)
Regulatory or
financial filings

32
Illustrative structure for ESG integration
Leading Governance Practices on Operationalizing ESG into the Business
Full Board
(or governing body)
Compensation
Committee
Nomination and
Governance
Committee
Audit Committee
Oversight of strategy owned at the
board-level
Oversight of risk is
shared
Other potential committees
Risk Committee
Other Committee
ESG/Sustainability
Committee
Chief Sustainability
Officer
Navigates organizational
complexity to deliver on
entity’s ESG commitments
Enterprise Risk
Management
Drives accountability and
visibility while monitoring
risks raised by
environmental and social
issues
Sustainability
Committees/
Groups
Allow for a collaborative
group to lead ESG
objectives across the
business
ESG Position Statement
Outlines ESG goals and
facilitates ESG integration
into business activities and
operation
Disclosure Committee
Typically includes senior
management; reviews and
approves ESG-related
disclosures for regulatory
filings
Management connection points

33
ESG risks and opportunities are business risks and opportunities. As the pace and impact of societal and environmental disruption
continues to intensify, organizations need to build capacity to drive ESG performance and resilience.
ESG Working Group
Risk
Identify, manage and respond to latent and emerging ESG risks;
integrate ESG risk capabilities into existing risk and control frameworks
Finance
Incorporate ESG-related risks into annual reporting and regulatory
filings, investor engagement, pricing, forecasting and budgeting,
capital-allocation and annual reporting
Legal
Understand and manage risk and liability considerations related to ESG
performance – e.g., inadequate, or inaccurate disclosure of material
financial risks
Compliance
Broaden the integration of ESG performance into the existing
management control frameworks to support compliance
around ESG risk
Internal audit
Integrate ESG risk and compliance considerations into the internal
audit plan to instill discipline and enhance controls related to material
ESG risks
Strategy
Integrate ESG factors to drive innovative and brand-enhancing
strategies, including strategic choices across the value chain
Communication
Optimize strategic communications to stakeholders to navigate
changing expectations and credibly demonstrate prioritization and
management of ESG risks and opportunities
Human resources
Invest in leading practices around employee health and safety,
diversity, equity, and inclusion, and development to attract, retain and
incentivize talent to innovate, drive productivity and deliver on the
business strategy
Sustainability function
Design and activate strategies to deliver on the corporate strategy,
Purpose and ESG objectives to drive performance
Operations
Prioritize and measure opportunities for cost savings, risk mitigation,
and reputation enhancement and implement solutions to reduce
resource inputs and wasteful outputs
ESG Working
Group

34
Do you have the team?

Teaming for ESG Reporting
Using your handout, take 5 minutes to consider your ESG team.
Do you have the appropriate people involved in preparing for the proposed
SEC Climate disclosure rule?
What is the cadence of communication in your ESG working group?
Is there someone else you could meet with to gain their perspectives?
You will have 5 minutes to complete the exercise.
Individual exercise (5 min total)
Instructions

Debrief Questions
1
Who from your organization is currently
involved in ESG reporting?
2
Who is not currently involved that you feel
should be?
3
What might optimize the ESG working
group structure in your organization?

37
Technology

Companies continue to face
challenges with data accuracy and
availability
• 35% list ensuring quality as the top
data challenge; another 25% cite
access to and quality of ESG data
as the greatest challenge
• 61% are prepared to disclose Scope
1 emissions, 76% Scope 2
emissions (up from 58% and 47%,
respectively, last year), however,
just 37% of respondents stated
they are prepared for Scope 3
emissions reporting
Companies are proactively
implementing changes to accelerate
disclosure readiness
• 81% report that new roles and
responsibilities have been created
to accommodate additional
disclosure requirements
• 99% expressed willingness to invest
in new technologies and tools to
meet stakeholder expectations and
future regulatory requirements
o Nearly half say they are very
likely (47%) or somewhat likely
(52%) to make these
investments in the next 12
months
Companies are beginning to shift from
commitment to action to address
• 57% of survey respondents have
already implemented a cross-
functional ESG working group to
drive strategic attention to ESG
topics; another 42% are in the
process of establishing one
• Companies are taking steps to
enhance internal governance and
control environments to prepare for
disclosures by implementing new
systems (45%), new controls (37%)
and hiring new staff (40%)
1 2 3
38

Companies are proactively implementing changes to accelerate disclosure
readiness
• 81% report that new roles and responsibilities have been created to
accommodate additional disclosure requirements
• 99% expressed willingness to invest in new technologies and tools to meet
stakeholder expectations and future regulatory requirements
o Nearly half say they are very likely (47%) or somewhat likely (52%) to make
these investments in the next 12 months
39
3

Successful ESG reporting starts with data management at the source and ends with report build that enables analytics. In order to
successfully navigate the journey, it is important to define requirements, identify gaps, and develop a formal path forward.
ESG Data Management and Reporting
40
Define ESG requirements and source data – ESG frameworks and standards
Organize structured and
unstructured data
Build reporting templates and setup end state presentations
Finalize end state report and
additional analysis
Data sourcing Data collection Data validation
Data enrichment
and calculation
Deliverable drafting Reporting Analytics
Data Management
Reporting

No ESG data system solution has comprehensive capabilities, so subject matter specialists recommend prioritizing your goals for an ESG
system and considering how the system will fit into existing infrastructure.
Resources: software, people, and budget
41
Initial Considerations ESG Systems Trends
• Align on your goals and desired capabilities and
functionalities for an ESG system to understand the
best fit for your organization
• Determine whether existing solutions could be
leveraged and if software solutions are required to fill
gaps
• Consider a minimalist approach, using as few systems
as possible and avoiding transferring from one system
to another
• Organizations are shifting to a more “real time” or
automated management of ESG
• There is no singular ESG system solution which
encompasses all capabilities from a broad ESG
standpoint, so it is important to prioritize desired
capabilities
• Some systems are good at data collection, where
others are better at external disclosure
• Many organizations use more than one system to
comprehensively report ESG

Debrief Questions
1
Do you believe your current technology
solutions are sufficient to meet your ESG
reporting goals?
2
If you want to explore technology alternatives or
enhancements, who from your organization could
you involve in that decision?
3 Have you budgeted for technology enhancements?

43
Deloitte Debrief

Environmental, Social, and Governance (ESG) Landscape Overview
Environmental, Social, and Governance (ESG): The time is now… are you ready?
Certain climate-related disclosures would likely be subject to SOX certifications
Under the proposed SEC climate disclosure rule, SEC registrants will be required to disclose:
• Scope 1 and Scope 2 greenhouse gas (GHG) emissions (and obtain assurance) and Scope 3 if material or targets have been set by the registrant
• Climate-related risks, governance, risk management, targets and goals and the impact of climate related events and transition activities on their financial statements
ESG extends beyond rules and regulations
• Emissions information is important in the supply chain and becoming a prerequisite for project and contract bids
• Ratings agencies incorporate ESG metrics and non-disclosure could impact ESG scores and credit ratings
US Government
suppliers
Private companies
U.S. based companies are not exempt from foreign regulations
• The Corporate Sustainability Reporting Directive (CSRD) was approved by the European Parliament in November 2022 extending to US-based companies with
subsidiaries in the EU
• Disclosure requirements include 12 environmental and social sustainability topics with reporting and assurance requirements as early as 2024
• A variety of recent developments from other regulators in Asia Pacific and specific EU countries are also emerging
U.S. Federal Government suppliers with over $7.5 million in federal contracts may be required to publicly disclose emissions information
The current Administration proposed a rule on November 10, 2022, that would require some Federal contractors to:
• Publicly disclose Scope 1, 2, and 3 GHG emissions and climate-related financial risks through the Carbon Disclosure Project (CDP)
• Set science-based emissions targets through the Science Based Target initiative (SBTi)
ESG risks and opportunities are business risks and opportunities
• ESG benefits include talent retention, better human capital dynamics, elevated brand value, legal and economic risk mitigation, etc.
• Tax credits and incentives, such as, the Inflation Reduction Act of 2022, provide financial incentives for sustainable activities
Technology investments are important for measurement, reporting, and disclosures
• 99% of respondents to Deloitte’s 2022 Sustainability Action Report believe that it’s somewhat likely or very likely that their organization will invest in more tools or
technology over the next 12 months to be prepared to meet stakeholder expectations and future regulatory requirements.
SEC registrants
Global operators
Technology
considerations
Business
considerations
Stakeholders expect prioritization of ESG to drive trust in long-term performance through the increasing pace of market disruption
If you don’t tell your story, others will. Get started and mobilize around ESG efforts.

Deloitte’s broad approach can help companies throughout their ESG Journey - From where you are today, to where you want to be in the
future.
ESG Journey: Proposed Roadmap
ESG Leader
ESG Materiality
Assessment
GHG
Inventory
ESG Strategy/Target Setting &
Alignment with Business Goals
Disclosure Gap
Assessment
Assurance
Readiness
Assurance: Review
or Examination
Disclosure Strategy &
Reporting Advisory Services
Governance
TCFD and Climate
Risk Analysis
Data Processes and
Controls Readiness

Working with Deloitte, you’ll gain access and information into industry setting standards. We have a seat at the table with multiple
climate and ESG standard setting and reporting initiatives, to help influence and advance greater standardization and transparency in
disclosure, allowing you to think ahead.
Giving You Greater Insight Through Our Eminence
• December 2022: Sustainability Action Report: Survey Findings on ESG Disclosure and Preparedness
• November 2022: Five Ways Tax Leaders Can Help Achieve Sustainability Goals
• October 2022: 2022 Climate Check: Business’ Views on Climate Action Ahead of COP27
• October 2022: Procurement and Supply Chain Resilience in the Face of Global Disruption
• October 2022: An Integrated Approach to ERM for a New Era of Emerging Risks
• August 2022: 7 Steps, 7 Questions to Prepare for New SEC Climate Disclosure Rules
• August 2022: Top Ways CFOs are Funding Decarbonization Goals
• July 2022: The Sustainable Technology Agenda: A CIO’s Call to Action
• May 2022: The Move Toward International Standardization of Sustainability and Climate Reporting
• May 2022: Are Companies Ready for Enhanced Climate Disclosures?
• March 2022: How Internal Carbon Pricing Drives Cost-Effective Net Zero Strategy
• March 2022: Navigating the SEC’s Climate Disclosure Proposal
• March 2022: SEC Proposes Rule on Climate Disclosure Requirements
• March 2022: SEC Proposes New Requirements for Cybersecurity Disclosures
Our thought leadership keeps you aware of the latest developments
related to climate change reporting and ESG.
The links below includes select examples of our broad experience with ESG topics:
Task Force on Climate-related Financial Disclosures (TCFD)
Member: DTTL Global Sustainability Services Leader
International Sustainability Standards Board (ISSB)
Technical input on behalf of WEF on the IFRSF’s TRWG in developing prototypes that
formed the basis of the ISSB EDs
Value Reporting Foundation (VRF): Merger of Sustainability Accounting Standards
Board (SASB) and International Integrated Reporting Council (IIRC)
• SASB: Assurance Advisory Task Force: Deloitte Americas Sustainability Services Leader;
SASB Foundation Board Member
• IIRC: Council Member and DTTL Chairman; DT member firms have participated in IIRC
Pilot Program to test IIRC approach
Carbon Disclosure Standards Board (CDSB)
Historical member of the Task Force: DTTL Global Sustainability Services Leader
Global Reporting Initiative (GRI)
Deloitte involved since inception; organizational Stakeholder since June 2004
World Business Council for Sustainable Development (WBCSD)
Founding member; Council Member and DTTL Chairman
Sustainable Stock Exchange (SSE)
Corporate Working Group member: Deloitte Americas Sustainability Services Leader
AICPA Chair of Sustainability Task Force
Deloitte Americas Sustainability Services Leader
United Nations Global Compact (UNGC)
Global founding signatory; actively involved in several high-impact pro bono projects and
secondments
1
2
3
4
5
6
8
SEC Proposed
Climate
Disclosure Rule
FAQ
European Financial Reporting Advisory Group (EFRAG)
Sustainability Reporting Technical Expert Group member
7
Work Toward
Net Zero
Banking on
Natural Capital
ESG Executive
Survey:
Preparing for
High-quality
Disclosures
The Turning
Point: A Global
Summary
How to Audit
ESG Risk and
Reporting
Leading in a Low-
Carbon Future: A
“System of Systems”
Approach to
Addressing Climate
Change
Planning for
SPAC: ESG in
the driver’s
seat

The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to
independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services
based on individual facts and circumstances
This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial,
investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it
be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your
business, you should consult a qualified professional advisor.
Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms,
and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”)
does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that
operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the
rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.
47

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