SEC Adopts Rules on Climate-Related Disclosures

The Securities and Exchange Commission (SEC) adopted final rules, by a vote of 3-2, on March 6 regarding reporting requirements for climate-related disclosures by public companies. The final version excludes Scope 3 emissions (although if a company has Scope 3 emission targets, it appears the company would need to report against those targets) and reduces reporting requirements for Scope 1 and 2 emissions. Companies must only report Scope 1 and 2 emissions if they believe they are material to investors. Climate disclosures would be made in annual filings companies make to the SEC and in registration statements filed before an initial public offering. The Alliance submitted comments on the proposed rule on June 17, 2022. The SEC received more than 24,000 comment letters. The final rules will become effective 60 days following publication of the adopting release in the Federal Register. Compliance dates for the rules will be phased in for all registrants. For further information, see the SEC Fact Sheet. West Virginia Attorney General, Patrick Morrisey, announced a coalition of 10 states will file a legal challenge. Senator Tim Scott (R-SC) also vowed to fight the rule under the Congressional Review Act.

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