SEC Adopts Climate Disclosure Rule Amid Controversy and Legal Challenges

SEC Adopts Climate Disclosure Rule Amid Controversy and Legal Challenges

By Prathamesh 11 March, 2024
news

The US Securities and Exchange Commission (SEC) has approved the Climate Related Disclosures for Investors rule, despite facing significant controversy. The rule mandates enhanced, standardised reporting through Inline XBRL for climate-related risks, aiming to provide investors with more reliable information. Although scaled back from its original proposal, the rule requires disclosure of climate risks, impacts, mitigation activities, and emissions data for large businesses.

Notably, Scope 3 reporting for greenhouse gas emissions has been eliminated, and smaller companies have received broad exemptions. Companies will begin disclosing climate information in iXBRL by fiscal year 2026, allowing for automated extraction and analysis. SEC Chair Gary Gensler underscores the importance of transparent disclosure for investors.

Despite support from a majority of commissioners, the rule faces opposition from businesses and politicians, with lawsuits pending from 10 US states challenging the SEC’s jurisdiction. The rule’s approval marks a significant step in providing investors with comprehensive climate-risk data, albeit amidst legal challenges and industry pushback.

To find out more details please visit : https://www.sec.gov/