SEC Proposes Far-Reaching Rules for “Enhancement and Standardization” of Climate-Related Disclosures
On March 21, 2022, the SEC issued proposed rules that would require public companies to include extensive climate-related information in their registration statements and periodic reports. The proposed rules would require disclosure concerning climate-related risks and impacts, oversight and governance of climate-related risks, climate-related financial statement metrics, climate-related goals, and greenhouse gas emissions. If adopted, the rules would present substantial new disclosure responsibilities for public companies. Whereas many public companies have been issuing voluntary climate-related disclosures outside of SEC filings, the proposed rules would require them to disclose such information in SEC filings according to rigorous disclosure methods, and certain information would be subject to attestation or independent audit requirements. The proposed rules would also indirectly compel companies to have monitoring, accounting, planning, and governance practices in place to enable them to satisfy the proposed disclosure requirements.
For more information on the SEC’s proposal, read our detailed Sidley Update here.