In the United States, ESG compliance is managed through disclosure frameworks overseen by the Securities and Exchange Commission (SEC). The SEC focuses primarily on financial materiality, ensuring that climate risks are disclosed transparently to safeguard investors.

[SEC Climate Frameworks]
  |- Scope 1 Emissions Data ----> Direct corporate emissions from owned operations
  |- Scope 2 Emissions Data ----> Indirect emissions from purchased energy systems

The SEC requires public companies to disclose material climate-related risks within their standard annual filings (such as the 10-K). This includes reporting direct operational emissions (Scope 1) and indirect emissions from purchased electricity (Scope 2), provided these metrics have a material impact on the firm’s financial health or strategy.

Because these disclosures are embedded in official SEC filings, false or misleading ESG statements carry significant legal liability. Executives can face investor lawsuits and SEC enforcement actions under anti-fraud provisions (such as Rule 10b-5) if they manipulate sustainability data to artificially inflate the firm’s stock price.