A divided SEC on Monday voted to propose highly anticipated rule changes that, if approved, will require companies to make climate-related disclosures including on climate-related risks that are expected to have a significant impact on them.
The more than 500-page-long proposal covers disclosures in companies’ registration statements and periodic reports, and would include disclosure of their greenhouse gas (GHG) emissions as a metric to assess their exposure to climate risks.
Specifically, the proposed rule changes would require a company to report on:
- Its governance of climate-related risks and relevant risk-management processes
- How any climate-related risks the company identifies have had or are likely to have a material impact on its business and consolidated financial statements in the short, medium or long term
- How any identified climate-related risks have affected or are likely to affect the company’s strategy, business model and outlook
- The impact of climate-related events, such as severe weather incidents, and transition activities on the line items of a registrant’s consolidated financial statements, as well as on the financial estimates and assumptions used…
