The Securities and Exchange Commission adopted (in a 3-2 vote) final rules requiring disclosures about the material impacts of climate-related risks on their business, financial condition, and governance.

These rules had first been proposed in March 2022.  The SEC adopted the final rules after considering, over a two-year period, some 4,500 unique comment letters from various authors. The SEC made some modifications from the Proposed Rules, most conspicuously withdrawing disclosure of greenhouse emissions from the users of a company’s products and services (so-called Scope 3 emissions). 

The SEC observes that many companies currently disclose substantial climate related information but characterizes this disclosure as “partial,” “fragmented,” “inconsistent” and “often difficult for investors to find and/or compare across companies.” The SEC says that its experience with its existing climate disclosure guidelines, in effect since 2010, indicates inadequate disclosures that leave the “need to both standardize and enhance the information available.” It says that “providing these disclosures in [SEC] filings also will subject them to enhanced liability that provides important investor protections by promoting the reliability of the disclosures.”

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