Marc Siegel, assurance partner and corporate & ESG reporting thought leader at EY, participated in a video interview in conjunction with Nareit’s REITworks: 2021 Conference.
Siegel discussed the growing use of non-financial information by investors who, “especially during 2020, have really figured out that the financial numbers alone don’t tell the whole story anymore and they require a further perspective.”
Investors are eager for more consistency in ESG information, Siegel said. “It’s going to be a much improved situation over the next couple of years when we start to see a more steady, consistent state of metrics being reported year-over-year by companies within the same sector.”
Meanwhile, the focus on non-financial information is expected to impact the corporate finance function. Even though they may not be experts, “who better than finance to compile information, process information, control information, and to build a cadence for reporting that information on a timely basis at year end,” Siegel said.
Siegel also noted that there has been a huge increase in activity among the regulatory and non-regulatory communities on ESG matters.
The SEC is expected to put out new proposals for comment on additional climate change disclosures and human capital disclosures later this year, Siegel said, which could call for more narrative and quantitative information to be mandated into the 10-K.
In addition, the EU has put out proposals which could impact U.S. companies with EU subsidiaries, while the IFRS Foundation is expected to launch a new global International Sustainability Standards Board.