This article is an excerpt from GreenBiz Group's 16th annual State of Green Business, which explores sustainable business trends to watch in 2023. Download the report here.

Carbon disclosure is being spotlighted on the international stage, with Belgium, Canada, Chile, France, Japan, New Zealand, Sweden and the United Kingdom among those requiring financial disclosures aligned with the Task Force on Climate-Related Financial Disclosure (TCFD). The United States will follow with the Securities and Exchange Commission’s proposed rule, the Enhancement and Standardization of Climate-Related Disclosures for Investors, which posits that the climate crisis creates financial risks for companies, requiring them to disclose their emissions and prospects in a climate-changing world.

Some of the world’s largest investors are on board. BlackRock, for example, released a statement in support of the U.S. rule indicating that the age of voluntary and unregulated disclosure is coming to a close. Others agree. "The business case has been made, and measuring climate risk and emissions is now seen as a preparedness tool," according to Elizabeth Small, general counsel and head of policy at the nonprofit group CDP.

With this transition to a mandatory disclosure world, a few developments are certain to follow. "Disclosure is a critical first step," said Steven Rothstein, managing director at Ceres. "It alone will not address the climate risks. We cannot solve this problem without having people and systems in place to measure it."

One expected development is an increase of companies hiring professionals and seeking technologies in support of what’s called MRV — for measuring, reporting and verification — to keep up with the demand by regulators, investors and customers for accurate carbon disclosure data.

The tide is changing, and fast.

The landscape can be confusing, and it will affect companies in different ways. Overall, there will be stricter standardization aimed at decreasing the mispricing of climate ri