Sustainability Experts: ‘Start Preparing Now’ for SEC Climate Rule, other Disclosure Regulations

July 17, 2024

The Securities and Exchange Commission’s climate risk disclosure rule has gone through quite the journey over the past two years. The rule was first proposed in 2022, mandating companies describe their levels of greenhouse gas emissions and strategy toward reducing climate risk on their Form 10-K — an announcement that was met with pushback from both companies and politicians, particularly state and federal Republicans.

After pushing out its initial release and reviewing over 24,000 comments, the SEC passed the highly anticipated rule with a 3-2 vote earlier in March. The final rule scrapped scope 3 emissions disclosures entirely and scaled back scope 1 and scope 2 reporting requirements.

Despite the final rule being a pared-down version of the original, the regulation faced legal action almost immediately, both from critics who said the SEC had gone too far and from supporters who said the SEC hadn’t gone far enough. Consequently, the agency announced its decision to stay the rule in April as it works through these legal challenges.

Though the rule’s implementation has been halted as of now, it is just one of a plethora of climate regulations American corporations must potentially comply with going forward. This includes disclosure requirements both on home territory with California’s two climate bills — Senate Bills 253 and 261 — and abroad with frameworks like the European Union’s Corporate Sustainability Reporting Directive.

To find out more details please visit : https://www.cfodive.com/