SEC Issues Proposed Rules Requiring Climate-Related Disclosures in Registration Statements and Periodic Filings

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On March 21, 2022, the Securities and Exchange Commission (SEC) proposed significant rule amendments, titled “Enhancement and Standardization of Climate-Related Disclosures for Investors,” which would require domestic and foreign registrants to include certain climate-related information in their registration statements and periodic reports.

The proposed rules would require a registrant to disclose, among other things:

  • Information about climate-related risks and their actual or likely material impact on the registrant’s business, strategy, and outlook;
  • The registrant’s governance of climate-related risks and relevant risk management processes;
  • The registrant’s greenhouse gas emissions;
  • Certain climate-related financial statement metrics in a note to the audited financial statements; and
  • Information about climate-related targets and goals.

The proposed rules — described in an SEC release spanning more than 500 pages — would require registrants to provide the climate-related disclosures in registration statements and Exchange Act annual reports through the adoption of a new subsection of Regulation S-K related specifically to climate disclosure, as well as a new article to Regulation S-X covering climate-related financial metrics.

The proposed rules contemplate disclosure compliance dates (as to most of the disclosures) of fiscal year 2023 for large, accelerated filers; fiscal year 2024 for accelerated filers and non-accelerated filers; and fiscal year 2025 for smaller reporting companies.

Elisha Kobre was quoted in Texas Lawbook commenting on the proposed new rule. To read those comments in full, click here. The full article, "SEC Issues Draft Climate Change Disclosure Requirements — Updated," can be viewed in The Texas Lawbook (paid login required).