According to a recently released preview of the RSM Middle Market Sustainability Survey 2024: US and Canada, 75% of middle-market companies report their organization has already taken steps to prepare for compliance with at least one of the sustainability regulations listed in the survey. The RSM surveyed 412 employees of middle-market companies and nonprofits with an annual revenue of $40 million to $10 billion in the United States (303 responses) and Canada (109 responses) from August 27 through September 3, 2024.

The “sustainability regulations” referred to in the survey consist of one or more of the following: 

• The U.S. Securities and Exchange Commission’s Enhancement and Standardization of Climate-Related Disclosures for Investors rule
• California’s Climate Corporate Data Accountability Act (SB 253)
• Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act
• The European Union’s Corporate Sustainability Reporting Directive (CSRD)
• The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD)

While the final report won’t be available until November, the preliminary release includes a number of interesting findings, a few of which are highlighted below.

Motivations for Embracing Sustainability Initiatives. When asked what considerations motivated their organization to embrace sustainability initiatives, the most popular survey responses were:

• Reducing environmental impact (38%)
• Complying with government or regulatory requirements (35%)
• Being consistent with the organization’s commitment to sustainability (32%)

Following the top three reasons given, 31% said supporting their local community or communities was a motivating factor, and 31% also said that supporting sustainability initiatives was the right thing to do as an organization.

Twenty-eight percent of respondents said attracting or retaining customers or clients was a consideration that motivated the organization to embrace sustainability. U.S. respondents were significantly more likely (32%) to cite business retention as a consideration compared to Canadian respondents (18%).

Preparing While Monitoring Legal and Political Developments. According to the survey, 84% of respondents said they are monitoring ongoing legal developments with respect to some of the sustainability regulations before acting on them. Additionally, 56% said their organization is waiting until after the U.S. presidential election before taking further action in this area. However, companies are still preparing to comply with the new regulations

• 82% say they have the appropriate people in place
• 85% say they have the appropriate controls in place
• 83% say they have the appropriate technologies in place
• 83% say they have the appropriate processes in place
• 82% say they are considering a substantial investment

Clean Energy Tax Credits. More than half of respondents report their organization has already invested in clean energy projects (54%). Among those who purchased clean energy tax credits, 93% say the availability of tax credits influenced their organization’s decision to invest (62% very influential; 31% somewhat influential).

Technology’s Role. The top three tools used for tracking and reporting on sustainability initiatives are artificial intelligence and machine learning (45%), data analytics platforms (39%), and supply chain management systems (38%). 

Seventy-seven percent of respondents say their organization has a dedicated project manager/project management team to support sustainability reporting.

The survey results also found that—although most respondents feel they have the appropriate controls, technology, processes, and people in place to meet regulatory requirements—69% of respondents believe they will need outside help to meet the requirements of new regulations.

The preview also covers the most common actions taken by companies as they prepare for regulatory compliance and top challenges expected and experienced.