How U.S. Companies Can Prepare for the SEC’s New ESG Disclosure Rules
- Gasilov Group
- Mar 25
- 5 min read
The U.S. Securities and Exchange Commission (SEC) is preparing to finalize one of the most significant corporate reporting shifts in decades: mandatory climate-related disclosures. While the proposed rule is still under review, its direction is clear—public companies will soon need to report standardized environmental, social, and governance (ESG) data with a level of rigor comparable to financial statements.
For many U.S. companies, especially those without mature ESG reporting systems, this transition won’t be simple. Compliance will demand more than updated spreadsheets—it will require integrated processes, cross-functional accountability, and assurance-ready data. Companies that begin preparing now will not only reduce regulatory risk but also strengthen investor confidence and improve strategic decision-making.
To be clear, the SEC’s proposed rule doesn’t create entirely new ESG expectations out of thin air. It aligns with global standards like the Task Force on Climate-related Financial Disclosures (TCFD) and builds on the momentum already visible across capital markets. Institutional investors such as BlackRock and State Street have long called for greater transparency around climate risk, while international peers in the EU and UK have moved faster with sustainability reporting mandates. The SEC’s proposal is a U.S.-specific catch-up—but with sharper teeth.
At its core, the proposed rule would require registrants to disclose climate-related risks that are reasonably likely to have a material impact on business, operations, or financial condition. This includes governance structures, emissions data (Scopes 1 and 2, and in some cases Scope 3), risk management processes, and the use of climate scenario analysis. Importantly, certain disclosures would need to be included directly in annual filings like 10-Ks, subject to third-party assurance over time.
While the timeline for implementation is still fluid, early drafts suggest phased requirements beginning as soon as 2026 for large accelerated filers. That’s not far off—especially considering the foundational systems, controls, and expertise needed to ensure reporting integrity.
For companies with limited ESG infrastructure, a smart first step is to conduct a gap assessment against the draft SEC requirements and related frameworks like the TCFD or the emerging ISSB standards. This process should map current capabilities, data sources, and governance structures—highlighting where controls, consistency, or ownership may be lacking. From there, firms can prioritize the development of robust internal processes for climate risk identification, emissions tracking, and materiality assessments.
It’s also important to build reporting processes that align ESG data with financial planning and enterprise risk management. Under the SEC’s rule, climate disclosures aren’t a separate appendix—they sit alongside financials and are subject to similar scrutiny. Legal, finance, sustainability, and operations teams will need to collaborate more closely than they have in the past. This means shared definitions of materiality, common data systems, and executive oversight.
Another often overlooked challenge is Scope 3 emissions—the indirect emissions from a company’s value chain. While not always mandatory, these are increasingly demanded by investors and may become required under the SEC’s final rule if deemed material. For many firms, Scope 3 is the least controlled and most complex category. Starting early to understand supply chain emissions and build reasonable estimation models will be critical, even if the final rule softens requirements in this area.
And while some may view compliance as just another reporting hurdle, there’s strategic value in treating ESG as more than a checkbox exercise. High-quality ESG data can reveal operational inefficiencies, inform capital allocation, and strengthen stakeholder relationships. Regulatory compliance may be the catalyst—but the upside can extend far beyond the SEC’s mandate.
Even among companies already disclosing ESG metrics voluntarily, many will need to significantly upgrade the quality and auditability of their data. The SEC’s requirements—particularly around assurance—imply a need for internal controls not unlike those applied under Sarbanes-Oxley. That means consistent methodologies, documented assumptions, and verifiable sources. Sustainability leaders may find themselves working more closely with internal audit and external assurance providers, not just sustainability consultants.
This regulatory momentum is not isolated to the SEC. California has passed its own suite of climate disclosure laws, including Senate Bill 253 and SB 261, which extend mandatory emissions and climate risk reporting to large companies operating in the state, regardless of where they’re headquartered. These laws will affect thousands of firms by 2026 and add further urgency to aligning ESG processes with evolving U.S. and global norms. The convergence of state and federal ESG mandates is no longer theoretical—it's operational.
For executives, this moment calls for more than compliance planning. It’s an opportunity to rethink ESG governance as a strategic function. That means elevating sustainability oversight to the board level, integrating ESG metrics into executive compensation structures, and embedding climate risk into capital investment decisions. Many leading companies are moving beyond annual sustainability reports to integrate ESG KPIs into investor presentations and earnings calls. The SEC’s framework doesn’t require this level of integration—but markets increasingly do.
Given the complexity, many firms are looking beyond internal teams for support. But not all ESG consulting is created equal. What matters now is deep regulatory fluency, cross-sector experience, and the ability to translate evolving disclosure requirements into operational strategies that are feasible, auditable, and aligned with long-term goals.
What’s clear is that waiting for the final rule to drop is not a viable strategy. Companies that delay will find themselves scrambling—not only to comply but to explain why they weren’t better prepared. Conversely, those that move now to build internal capacity, strengthen ESG governance, and align with global standards will be better positioned to navigate not just compliance, but competitive advantage.
At Gasilov Group, we help organizations translate ESG expectations into strategic action—tailored to your sector, risk profile, and growth objectives. Whether you’re building ESG reporting from scratch or refining your current disclosures to meet SEC scrutiny, we provide the insight, structure, and execution support to get you there—without wasting resources on what doesn’t matter.
Let’s talk about how to prepare—intelligently, efficiently, and with the future in mind.
Frequently Asked Questions
What is the SEC’s ESG disclosure rule about?
The SEC’s proposed rule focuses on mandatory climate-related disclosures, including greenhouse gas emissions, climate risk management, and related financial impacts. It aims to bring consistency and transparency to ESG reporting in the U.S.
When will the SEC ESG disclosure rule go into effect?
While the final rule is not yet confirmed, implementation could begin as early as 2026 for large companies. Phased timelines are expected based on company size and filer status.
Are Scope 3 emissions required under the SEC proposal?
Scope 3 emissions will be required if deemed material or if a company has set emissions targets that include Scope 3. However, these requirements may be subject to change in the final rule.
How does this compare to ESG in the EU or UK?
The EU and UK are further ahead, with mandatory sustainability reporting already in place under frameworks like the CSRD and SECR. The SEC’s rule represents a major step toward global convergence.
What should U.S. companies do now to prepare?
Begin with a gap assessment, align ESG data with financial processes, and build cross-functional governance. Prioritize data systems and assurance readiness, and consider engaging expert advisors to accelerate your preparation.
