By now, most CPAs are aware that the SEC issued a landmark proposal that would require standardized disclosure of climate-related risks for companies, though they may not be aware of exactly what the proposal requires and when it takes effect. While the ultimate provisions remain uncertain—in large part due to the politically contentious nature of the SEC’s initiative—that does not mean corporate leaders and their financial advisors should sit still. The author outlines a five-step strategy companies can adapt to be prepared for the SEC proposal’s implementation, strengthening internal communications, reporting systems, and accountability in the process.
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In March 2022, the SEC issued Release Nos. 33-11042 and 34-94478, collectively entitled “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (https://bit.ly/3XYYjp6). This proposal would require registrants to provide information on certain climate-related risks and greenhouse gas (GHG) emissions in their SEC filings. Undoubtedly, climate-related risks disclosures entail many costs and will also prove to be complicated and controversial. They will have accounting, auditing, tax, and governance…
