Survey: As Sustainability Rules Come Into Focus, Middle Market Companies Take Action

RSM's Middle Market Sustainability Survey 2024 shows that middle market businesses in the United States and Canada are making strides to adapt to recent or forthcoming sustainability regulations, even while some final rules have yet to be determined, new survey research from RSM finds. Moreover, these companies acknowledge that meeting sustainability requirements in an evolving regulatory landscape requires outside help.

A large majority (75%) of respondents report their organization has already taken steps to prepare for compliance with at least one of the sustainability regulations listed in the survey. The sample—provided by Big Village Insights—consisted of 412 professionals at middle market companies and nonprofits in the United States (303 responses) and Canada (109 responses), surveyed from Aug. 27 through Sept. 3, 2024.

“This is a big shift,” says Tu Nguyen, RSM Canada economist. “Ten years ago, sustainability was seen as something that a few niche businesses would participate in, and others may not have paid much attention. Today, that’s no longer the case.”

The report follows some debate in recent years around the rising importance of sustainability and other environmental, social and governance issues for businesses. Now, numerous regulations coming into effect are making sustainability a larger compliance issue. In the RSM survey, “regulations” referred to one or more of the following:

• The U.S. Securities and Exchange Commission’s Enhancement and Standardization of Climate-Related Disclosures for Investors rule (referred to in the survey as the greenhouse gas reporting 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
• The European Union’s Corporate Sustainability Due Diligence Directive

Disclosures required by these regulations—some of which are already in effect and some of which are pending or not yet passed—include greenhouse gas emissions, information about climate-related risks, and human rights and environmental impacts in companies’ operations and value chains.

To qualify for participation in the survey, respondents were required to have at least some influence on decisions related to sustainability/corporate social responsibility at their organization. Additionally, the survey targeted organizations with annual revenue of $40 million to $10 billion (not applicable to nonprofits).

“This is a much broader topic than just environmental concerns or just social concerns or just governance concerns,” says Jon Caforio, a principal and sustainability consulting leader at RSM US LLP. “Sustainability is becoming more about whether you are a good business to do business with.”

The sample consisted of 412 professionals at middle market companies and nonprofits in the United States (303 responses) and Canada (109 responses).

Respondents were required to have at least some influence on decisions related to sustainability/corporate social responsibility at their organization. Additionally, the survey targeted organizations with annual revenue of $40 million to $10 billion (not applicable to nonprofits).

SOURCE: RSM US