New ESG Rules Create Urgent Need for Energy Efficiency
A new rule is expected to come into effect that would be a game changer for all publicly traded companies: the Securities and Exchange Commission (SEC) may require companies to report on their climate impact. Whereas climate reporting is currently voluntary and does not follow any one set of regulations, this potential new policy would provide a lot more transparency—including companies having to report on their emissions while adhering to certain reporting standards.
The policy is still being finalized, and the details of the reporting requirements are being debated. Companies would likely need to share their Scope 1 and Scope 2 emissions, but there is some controversy around the possible inclusion of Scope 3 emissions as well, which are those found along a company’s supply chain.
Regardless of the details, the pending climate disclosure rule is a sign of turning tides, and if adopted will help reduce “green washing,” where companies cherry pick information to portray themselves as climate friendly. It will also help investors better assess risk, as reliance on fossil fuels will be a hindrance on the path to net zero.
It is clear that companies across the U.S. are facing increasing pressure to reduce their emissions and provide more transparency about their environmental impact. This means adopting energy efficient technology and practices is more urgent than ever.
Though it’s expected that the SEC will make a decision about this new rule early in 2024, but similar laws already exist elsewhere, such as the European Union. Plus, the state of California has already gone ahead with its own climate disclosure rule. The California Climate Accountability Act was signed into law in October 2023, and it will require both public and private companies that do business in the state (with annual revenue over $1 billion) to report on emissions, including Scope 3 emissions.
This unprecedented new law will go into effect at the beginning of 2026, and it’s expected the SEC’s rule will be on a similar timeline. As a result, companies are now scrambling to build teams to focus on this reporting and at the same time working to reduce their emissions.
How to Simplify Measuring and Reducing Emissions
With all these new regulations on the horizon, energy efficiency is no longer a “nice to have” especially for large national companies. Emissions reductions are vital for the planet and for businesses, and the best way to achieve this reduction is by increasing efficiency. The reality is most companies are using a lot of energy unnecessarily., In fact, commercial buildings waste 30% of the energy they consume on average, according to the Department of Energy, due to outdated equipment, overuse, and poor management. Updating energy equipment and adopting technology that can measure and save consumption is critical to eliminating waste and decreasing your carbon footprint.
Using less energy is also good for business in that it can decrease utility costs and aid profitability. The only issue is that the upfront costs of this technology and the time to install and manage new equipment—especially at multiple locations on a national scale—can be insurmountable for many businesses. That’s why so many are choosing to outsource their energy efficiency projects to an energy-as-a-service company like Budderfly.
At Budderfly, we help businesses reduce energy waste by providing upfront capital, procuring equipment, installing upgrades, managing and monitoring technology—with no upfront costs. We’re a holistic, one-stop-shop for energy upgrades, combining high-efficiency equipment with our own patented energy-saving technologies. Plus, we measure energy at every point of consumption and provide deep data and insights on emissions and savings.
We’re already helping more than 5,500 businesses across the country, including national-scale chains, franchises and more. If you want to chat about these upcoming regulations and how Budderfly can help you get ahead with emissions reduction, contact us today.