PwC, the SEC, and sustainability

From annual and manual to an automated, measured, and sustainable reporting

In early May, TBR met with PwC’s Casey Herman, the firm’s US ESG Leader and a longtime PwC Partner, to discuss PwC’s views regarding developments around sustainability and decarbonization. Herman explained that PwC’s clients increasingly understand the need to apply enterprisewide accountability to sustainability efforts, including bringing investments, measuring and reporting of standardized metrics up to par with financial disclosures and responsible corporate governance.


Unlike traditional accounting systems and processes IT, which have benefited from decades of development around ERP systems and recent advances in automation, sustainability reporting often remains “annual and manual,” in Herman’s colorful turn of phrase. For enterprises, he added, quantifying the impact of moving to sustainable operations, either through self-imposed changes or legal and regulatory compliance, will be key to change and success. And just as IT and financial decision-making benefits from consistent, reliable, and frequent metrics, sustainability will also need to move to a more frequent basis, with more standardized inputs and outcomes.

What clients need and what the SEC wants

Helping to accelerate that change — potentially — the Securities and Exchange Commission’s (SEC) March 21, 2022, release of proposed rules around climate change disclosures gave U.S. companies and consultancies, like PwC, a clear and defined rallying point for understanding near-term climate change strategies and goals. Road maps, data orchestration, change management and, of course, governance, risk and compliance can now all circle back to these proposed rules, expected changes and likely timelines. When TBR asked Herman what, other than the weight of the SEC, might compel companies to fully embrace these changes, he suggested that compensation metrics tied specifically to hitting sustainability goals will likely be the most compelling force. He noted that the market’s two greatest needs at present — automation and quantifiable results from shifting to sustainable operations — remained unmet, but the SEC’s proposed requirements could accelerate progress on both.


According to Herman, the proposed SEC guidance asks companies to do three things:

  1. Disclose climate-related risks that may have a material impact on assets and the business.
  2. Disclose, and subject to third-party assurance, Scope 1 and Scope 2 emissions, and disclose Scope 3 emissions if they are material or if the company’s sustainability goals include Scope 3. Herman added that Scope 3 is “an estimate, not a measurement,” which may be why the SEC has not added an attest requirement for Scope 3.
  3. Include a footnote in financial statements describing any historical costs and investments directly related to the impact and remediation of severe weather events and mitigating risks related to climate change — essentially, what has the company already spent on these efforts. Notably, because the SEC proposes this requirement be in a footnote, it too would be audited.

Herman speculated the timeline for adopting these requirements could be pushed beyond the presently proposed 2023 start date (reported in 2024) and that the phasing of the audit requirements may evolve through the public comment period and subsequent SEC revisions.

What PwC can do for clients: enable measurement, plan for success and implement change

After detailing PwC’s views on the SEC’s proposed rules, Herman circled back to how PwC helps their clients, outlining four essential services:

  1. Assisting clients with their reporting, valuation, and measurement of key metrics and KPI aspects related to sustainability — Based on the firm’s heritage and current capabilities, Herman noted, “we do this quite well.”
  2. Technology enablement of reporting, valuation, and measurement — Herman explained that most clients use non-enterprise grade technology for their valuation and measurement (the “annual and manual”), which lack automation, AI and dynamic decision-making tools. PwC, in TBR’s view, has invested heavily in recent years to accelerate and amplify the firm’s technology capabilities, including around automation, low-code, and AI platforms, positioning it well for the next technology evolution in sustainability.
  3. Net zero strategies and sustainable business strategies — Similar to valuation and measurement, strategic planning and governance are firmly within PwC’s wheelhouse.
  4. Implementation (of all the above) — Including organizational culture and change management, tax strategy consulting, and other related ESG services and solutions associated with sustainability and decarbonization.

In TBR’s view, PwC’s range of services reflect the firm’s evolution toward a technology-forward company still rooted in its core competencies and legacy values.

Regulatory pressures and consulting capabilities sustain sustainability

Sustainability trended before, and already the signs of a global recession, lingering supply chain challenges, and an ongoing war in Europe threaten to return sustainability and decarbonization to the back burner. TBR pressed Herman on what might compel change this time. Why will companies invest in new technologies and adopt new reporting requirements, other than to do the minimum to meet regulations? Herman suggested TBR follow the money. When metrics around decarbonization drive investor, lender and customers decisions, as well as potentially compensation, particularly within the C-Suite, enterprises will adjust accordingly and put meaningful investments into measuring and sustaining their sustainability goals.


In TBR’s view, two other intertwined forces may likely be accelerants to adoption: political pressures to meaningfully enact and then enforce the SEC’s proposed rules combined with consultancies and technology vendors leveraging those pressures to move their clients to act. Sarbanes-Oxley and Dodd-Frank come to mind when considering how regulatory pressures may create a favorable climate for consulting services around sustainability.


We believe, if the SEC’s rules reach adoption and credible, consistent enforcement, PwC may increasingly become a necessary sustainability collaborator for the firm’s clients. Even uncertainty around the regulations, timeline, scope and enforcement plays to PwC’s strengths in being positioned to provide clients with essential advice in staying on the right side of climate change while securing growth and reducing risk.


In July TBR will publish a Decarbonization Market Landscape examining the commitments, investments and actions to date around decarbonization by a select group of IT services vendors and consultancies. We will also detail the offerings those vendors bring to their clients to help with reaching decarbonization outcomes. Access this new report as soon as it publishes with a 60-day free trial of TBR Insight Center™.

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