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CFOs navigate SEC climate rules & GenAI


CFOs navigate SEC climate rules & GenAI

Voice of the CFO | March 2024

Discover how CFOs navigate SEC climate rules and GenAI, harmonizing climate disclosures with AI advancements to shape financial leadership and strategy.

MARCH 2024

As the finance landscape is becoming increasingly complex, CFOs are facing two significant shifts: the new SEC climate disclosure rules and the expanding rise of Generative AI (GenAI). Navigating these shifts necessitates innovative strategies for CFOs to manage their organization's financial health and opportunities.

Some key factors and considerations for CFOs in their financial function and strategic decision-making:

Deciphering new climate rules

CFOs are finding themselves in the throes of interpreting new climate disclosure rules set by the SEC for US public companies. Accommodating detailed exposure of greenhouse gas emissions might unsettle some, but understanding the complexities of these rules is crucial for informed compliance and disclosure reporting. The new concept of materiality, requiring companies to evaluate the importance of their climate-related disclosures, adds a new dimension to the CFO's responsibilities.

Update: SEC Stays Climate Rule

On April 4, 2024, the SEC issued a stay of its climate disclosure rule, pending judicial review. This comes on the heels of our regulatory discussion on the topic. Our understanding/advice: no change in SEC’s position regarding its authority; no effect on companies preparing for compliance.

The SEC climate disclosure rule is temporarily paused while legal challenges are resolved. The rule’s effective date, January 1, 2025, is uncertain. It’s worth noting that companies are continuing to prepare for the rule as challenges may fail. Some firms are considering the SEC rule alongside other reporting requirements, while others are still moving ahead with its implementation.

For more information, please refer to our article.
Read more SEC stays its climate rule pending judicial review

Welcoming GenAI's emergence

Parallelly, GenAI strides onto the scene as an innovative tool to streamline tasks, generate savings, and enhance forecasting. For CFOs, the application of GenAI could present an advantageous environment for competitive intelligence, efficient financial reporting, and potential disruptions to traditional processes, such as claims handling in the insurance sector.

Harmonizing climate disclosures with GenAI expansion

CFOs are now in a strategic position where balancing climate disclosures and the application of AI advancements becomes significant. They are tasked with guiding their organizations' compliance to the new climate norms and leading the adoption of GenAI for the finance function, with a keen eye on data integrity for efficient AI operation.

Shaping financial leadership and strategy

The attention on understanding and adhering to climate disclosure rules, coupled with harnessing the GenAI's potential, is leading CFOs towards progressive horizons of financial leadership and strategic decision-making. Their ultimate goal is to proficiently manage risk, maintain stakeholder trust, and seize the novel opportunities that these developments present.

Dive into our thinking:

CFOs navigate SEC climate rules & GenAI

Uncover how CFOs are addressing key finance challenges by adhering to new climate regulations, managing corresponding risks, and harnessing the power of GenAI

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Meet our team

Image of Sanjay Sehgal
Sanjay Sehgal
Head of Markets, Advisory, KPMG US
Image of Maura Hodge
Maura Hodge
KPMG Sustainability Reporting Leader, KPMG US

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