The US Securities and Exchange Commission has adopted new climate disclosure rules for listed companies.
The new rules require companies to provide standardized qualitative and quantitative disclosure about climate-related risks, expenditures and greenhouse gas emissions. Most notably, Scope 3 disclosure is not required in the new rules and Scope 1 and 2 emissions will be subject to a materiality standard. Companies will need to disclose the identification, management, and oversight of climate-related risks in line with TCFD recommendations.
A summary of required climate-related disclosures:
- Climate-Related Risks
- Impacts of Climate-Related Risks
- Mitigation or Adaptation Activities
- Activities to Mitigate Climate-Related Risks
- Board Oversight
- Process for Managing Climate-Related Risks
- Climate-Related Targets
- Emissions Disclosure
- Assurance Report
- Financial Impact of Weather Events
- Financial Impact of Carbon Offsets
- Estimates and Assumptions
The new rules are planned to be phased in over the next two to ten years and will be subject to Congressional challenges.
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