"Don't Look Up" is a somewhat campy 2021 satire featuring two earnest astronomers (played by Jennifer Lawrence and Leonardo DiCaprio) who try to convince a skeptical public—as well as a jaded and self-interested U.S. president (Meryl Streep)—that a deadly comet is headed toward Earth.
At the bottom line, the film sends the message that few people these days, including those in positions of power, care about the destruction of the world as much as they care about what's right in front of them—like the latest romantic scandal involving singer Ariana Grande, who plays a character much like herself.
"This isn't a film about how humanity would respond to a planet-killing comet," writes Tim Mohin, chief sustainability officer for Persefoni, which helps companies with sustainability efforts. "It's a film about how humanity is failing to respond to a planet-killing climate crisis."
Mohin seems to know what he's talking about: Formerly, Mohin served as chief executive of the Global Reporting Initiative. He also held sustainability leadership roles with Intel and Apple, and he worked on environmental policy in the U.S. Senate and at the U.S. Environmental Protection Agency.
The movie "certainly captures how many of us in the sustainability sector have felt like we were screaming into a void for years," Mohin writes for Fast Company. "But on our better days, we can also take stock of the tremendous progress that has been made across the spectrum of Environmental, Social, and Governance (ESG) issues."
Mandatory Climate-Related Disclosure Gets Initial Approval
A little more than two weeks ago, the U.S. Securities and Exchange Commission (SEC) voted on new rules that would require public companies to disclose climate-related risks and greenhouse gas emissions. The proposal would introduce a framework that companies would use to disclose such information in their annual reports and stock registration statements.
The idea is to give investors a sharper picture of the risks that climate change might pose to a company's bottom line.
The SEC is taking public comments on the proposal for 60 days, though the commission has given no firm date for adopting the rules.
Opposition from some Republicans and business trade groups was swift. Ultimately, the SEC's proposal could hold companies accountable for how they contribute to climate change and give investors ammunition to demand that companies change their business practices so they leave less of a carbon footprint.
Hester Peirce, a Republican commissioner, voted against the proposal and said that it tells "managers how regulators, doing the bidding of an array of non-investor stakeholders, expect them to run their companies."
Rep. Patrick McHenry of North Carolina, the top Republican on the House Committee on Financial Services, called the proposal "tone-deaf and misguided" and said the information that the SEC seeks "is not material for most companies."
The U.S. Chamber of Commerce, a business lobbying group, argued that the current state of ESG reporting is strong.
"The Chamber is concerned that the prescriptive approach taken by the SEC will limit companies' ability to provide information that shareholders and stakeholders find meaningful while at the same time requiring that companies provide information in securities filings that are not material to investors," stated Tom Quaadman, executive vice president for the U.S. Chamber's Center for Capital Markets Competitiveness, in a press release. "The Supreme Court has been clear that any required disclosures under securities laws must meet the test of materiality, and we will advocate against provisions of this proposal that deviate from that standard or are unnecessarily broad."
Voluntary Reporting on the Rise
In 2021, the business world hit peak sustainability reporting with 92 percent of the S&P 500 and 70 percent of the Russell 1000 companies issuing reports.
All of these are voluntary disclosures, noted a November 2021 report from the Governance & Accountability Institute. For instance, companies like Apple, Facebook, Google and Microsoft already report extensive data and have set deadlines by which they hope to have zero carbon emissions.
"The last few years have been incredibly challenging with the compounding crises of COVID-19, social inequity, climate change, and for many a loss of trust and faith in our institutions," said Louis Coppola, the Institute's executive vice president and co-founder. "During these trying times, the focus on ESG and sustainability issues and topics has continued to deepen and accelerate. In some ways, I believe this acceleration is a direct reaction by society to the problems we all face and the environment we now find ourselves in, and I believe it will help us navigate our way through these crisis situations and the ones to come."
For Boards, Balancing ESG with Other Priorities Proves Tricky
Even when companies are willing to voluntarily make such disclosures, the effort can still be tricky.
For company board members, "it's tough to find balance between the short term, meeting monthly and quarterly targets, and looking broadly at long-term risks and opportunities involving stakeholders and the wider community, from the environment to human rights and ethics in supply chains," writes Maureen Kline for Inc.
Moreover, she notes, "board members, ultimately responsible for oversight and protection of their companies, don't necessarily have experience in the new field of ESG."
The writer offers five tips for board members, including to peruse the company's policies for employees and suppliers and to ask about ethics; human rights; diversity, equity and inclusion; and whistleblower policies.
She also recommends that boards ensure ESG is integrated into the company's core business and "focus on both inbound and outbound materiality." For example, she writes, in the case of climate change, "do rising temperatures pose a risk of fire, flood or drought for your company's physical assets or supply chain?"
"Being a board member has become much more complex," Kline writes. "May 2022 be the year board members get their ESG credentials in order."
Dana Wilkie is the managing editor of the SHRM Executive Network. She is in charge of the EN: Brief and Managing Smart newsletters. For a complete list of articles, visit Dana's SHRM author page.