A Strategic Approach to “E”SG Reporting

Authors

• Taylor Nchako

Author Details

Taylor Nchako, former Climate and Clean Energy Fellow, Northwestern Pritzker School of Law.

First Page

319

Abstract

Environmental, Social, and Governance (ESG) factors have emerged as an important investment tool for the financial sector to address climate change. While the federal government has abandoned ESG disclosure, U.S. firms still face reporting obligations domestically and abroad. States across the country have proposed or passed two types of disclosure laws: greenhouse gas emissions disclosure and climate risk disclosure. These state-level efforts mirror actions in the European Union, Canada, and other jurisdictions in which U.S. firms operate.

As ESG disclosure standards are adopted in jurisdictions around the world, these standards are undergoing various advancements, reductions, and contestations. These shifts in ESG reporting standards provide an opportunity to evaluate existing gaps in reporting.

This Essay proposes that one glaring gap persists: disclosure laws do not require disclosure of whether, and to what extent, a firm uses “strategic instruments”—tools like power purchase agreements and supply chain contracts—to manage climate mitigation and adaptation. These strategic instruments provide a better picture of how firms commit to improved climate risk management than the status quo. Yet with much of the policy debate and legal scholarship focused on the efficacy, scope, and equity of emissions metrics, this reporting gap remains underdiscussed.

This Essay fills that gap. It outlines current disclosure standards and California’s greenhouse gas emissions and climate risk disclosure laws. It expounds the importance of strategic instruments in climate mitigation and adaptation to investors, managers, and regulators. To understand the relevance of strategic instruments in corporate ESG reports, this Essay evaluates the Task Force on Climate-Related Disclosure (TCFD)-aligned reports of over 100 corporations subject to California’s disclosure laws. It highlights that strategic instruments, and metrics to measure their use, remain underreported in climate mitigation and adaptation disclosure.

Recommended Citation

Taylor Nchako, A Strategic Approach to “E”SG Reporting, 30 Lewis & Clark L. Rev. 319 (2026).
Available at: https://lawcommons.lclark.edu/lclr/vol30/iss2/4