SEC adopts climate disclosure rules

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.