Welcome to Climate Money Work, a weekly newsletter that connects revenue generation with sustainable business solutions. Discover how companies worldwide are showcasing innovative practices, creating value from sustainability, increasing revenue, and improving customer experiences. Send questions, feedback, and pitches to [email protected], or just hit reply.

SEC Climate Rule  

I was in Washington, D.C. at the National Press Club when the U.S. Securities and Exchange Commission (SEC) announced adopting the first federal rule requiring certain public companies to disclose their greenhouse gas emissions and climate risks. The excitement was palpable!

The rule, in the making for two years now, marks a significant move toward corporate climate disclosure, aligning the U.S. with similar regulations in the European Union and California. The SEC's 3-2 vote saw three Democratic commissioners supporting the rule, while two Republicans opposed it. The rule notably excludes the reporting of Scope 3 emissions.

Here are the key takeaways:

Scope 3 Exclusion: The rule eliminates requiring companies to report Scope 3 emissions, focusing only on direct (Scope 1) and some indirect (Scope 2) emissions deemed "material."

Materiality Decision: Companies will report Scope 1 and Scope 2 emissions only if they consider them "material," allowing flexibility in disclosure.

Exemption for Smaller Companies: Smaller companies are currently exempt from reporting emissions (some information outside of emissions will need to be disclosed fiscal year 2027) while larger companies are to begin reporting emissions from fiscal year 2026.

SEC's Estimate: Around 2,800 U.S. companies are expected to make disclosures, along with about 540 foreign companies operating in the U.S., reporting timelines differ based on company size.

Financial Impact Disclosure: The final rule requires publicly traded companies to disclose anticipated costs associated with transitioning away from fossil fuels, including risks related to climate-related events.

Litigation: The rule is anticipated to face legal challenges, with industry groups criticizing SEC for potential overreach beyond the agency's mandate. In fact, 10 Republican-led states sued -the same day the rule was announced- challenging the SEC.

Global Alignment: The SEC's move follows similar climate disclosure rules in California and the European Union, reflecting a broader global trend toward standardized corporate climate reporting. 

There is certain to be more to come, so stay tuned!

Sources:

• SEC approves rule requiring some companies to report greenhouse gas emissions. Legal challenges loom (AP)

• Republican-led states sue US SEC over climate risk disclosure rules (Reuters)

Behind the Numbers

Federal Reserve Chair Jerome Powell intends to exercise caution and careful consideration in implementing rate cuts, suggesting that they are likely to occur only when the Fed is assured that inflation is moving towards the 2% target.

Anticipated later this year, the challenge lies in finding the right balance; a slow approach could pose challenges with high-interest rates, while a rapid one might lead to inflation surpassing the 2% goal. The Fed’s aim is to gather and analyze data to ensure a gradual progression that minimizes adverse effects on employment and the broader economy.

For more: Jerome Powell Says Fed on Track to Cut Rates This Year (WSJ)

 Elevating Revenue Growth and Client Experience

The Chief Revenue Officer (CRO) role's prominence on 'LinkedIn Jobs on the Rise' last year drew attention due to its novelty and the challenge of enhancing a firm's revenue amid current economic, geopolitical, and environmental conditions. CROs operate in a landscape where climate, employee engagement, data, and AI play crucial roles. Most importantly, they act as trusted advisors to customers.

Climate Money Work's new monthly series, "CRO Chronicles," features conversations with CROs across various industries, offering insights on crafting commercials, delivering value, engaging stakeholders, and leveraging technology while generating revenue, improving customer experiences, and aligning with corporate citizenship. 

CRO Chronicles: Shareen Minor, CRO Ontellus 

The inaugural edition of “CRO Chronicles” features Shareen Minor, the CRO of Ontellus. Ontellus utilizes technology to provide records retrieval products to insurance companies and law firms, with a strong emphasis on data security and time efficiency. 

Climate Money Work: Talk about your work in sales management versus being a CRO.   

Shareen Minor: Sales management is all about setting the strategy, setting the goals, setting the roadmap, removing obstacles so salespeople can go out and do that outbound relationship building. We want to be able to get out and see clients and be that trusted partner with clients; hear the clients’ voices. 

So much of the CRO role still touches those areas but is analytical and financial. It’s about looking at the numbers and analysis of the client, then the trends of that client, the average order and behavior of the client. 

I think about how we invest in the client – with new products etc.- with all this analytical and financial information. I want to return the investment to the client.  And then make sure there are margins for revenue growth. 

The CRO role really has a lot of financial and analysis aspects. 

CMW: What is the foundational key focus point for anyone who's in sales no matter what you're selling, and no matter who you're selling to? 

SM: When I asked feedback from my SVP and my VP on this last year, they said that I listened.  Listening to your whole environment and your whole company is so valuable. I listen to the ops team, I listen to the finance team, I listen to my team especially, and I listen to the clients most of all. And after I took that time to listen, I was very much ready to take that step in how to bring new business in a different way -a different angle that hadn't been thought of before- to the table, but also how to enhance the experience for our clients. I was able to identify areas that people who had been in the company for a while hadn’t thought about, some different ways to approach growth. 

I think listening is probably the biggest strength that you have. 

CMW: What role may CROs play in engaging boards or their owners (PE firms etc.)?

SM:  It's a great question because I had to figure that out many companies ago. If you don't have a voice at the table, sometimes your voice isn't being heard correctly. You want to have that voice and maximize it, or you want to have at least one liaison that you can talk to about what your team is doing or what you're driving. From a private equity perspective, there's usually an analyst on the private equity team that understands what we’re doing and the numbers we’re driving; the retention growth and client profile we’re driving.

My operations person and I slice and dice the numbers in different ways, so we’re able to provide so much data that the PE analyst never received before. In this way, we brought a lot of value to them. If you really bring that value to the analyst, you'll start to escalate your relationship, because that analyst is then talking to the sponsor or the person that's leading the PE firm and giving that data. And you will establish value and knowledge, They’ll let the PE or the investor know “We got this from the CRO”. Then you start to build a relationship. But, if you're not at the table, your knowledge base- what you know and the value you add- isn't being articulated either. As a CRO, you want to be at the table as revenue and growth are being discussed.  

CMW: Let's talk about how sustainability or impact plays a role in your work as a CRO. So, whether that be your employees, workplace, customer engagement etc. How are you seeing that impact play out? 

SM: This year we just rolled out the Net Promoter Score (NPS) for the first time.  I’m very focused on employee engagement. Here is why those are important and impactful. 

If we're not listening to the client through either NPS or surveys, then we're not staying stable and innovative for them. We’re not listening to their needs. 

I think it's very important that my team feels that they have ownership and are able to talk to people across the enterprise. I set up a focus group for all my key sales and marketing people to talk to the CEO quarterly, so they get the insights of what the CEO is looking for. 

They may be tapped for new product launches. They may go out and talk to clients and bring back key information. And when they’re doing those actions, they feel like they're a part of what's building within the company. And if we don't create that for our teams, then they’re just doing task work. We have to create inclusion for our teams.

Thanks for joining us this week. Please send questions, feedback, and pitches to [email protected] or just hit reply to this email.

FEATURED INSIGHT
For more on the year ahead, access our on-demand webinar, Navigating 2024: Climate, SFDR, and CSRD Regulations Webinar, featuring insightful commentary from experts at American Century Investments, ESG Global Advisors, Silver Regulatory Associates, and more.