SEC proposes climate-related risk disclosure rules

Sydney K. Garmong, CPA; Wes Kelly, CPA; Christopher T. McClure, CPA; and Mark C. Shannon, CPA
3/29/2022
Learn about what the SEC's newly proposed climate-related disclosure rules include and read considerations for management and boards and for those who choose to comment on the proposal.
SEC proposes climate-related risk disclosure rules
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SEC proposal highlights

The SEC voted to propose climate risk disclosure rules on March 21, 2022, after receiving more than 5,000 comment letters, including approximately 600 unique comment letters over the course of the previous year.

Proposal details

The SEC is seeking public comment on all aspects of the climate-related disclosure proposal. Under the current proposal, a domestic or foreign registrant would be required to include in registration statements and periodic reports disclosures addressing:

  • How an entity’s board and management govern and manage climate-related risks
  • Actual or likely material impacts of climate-related risks on the registrant’s business, strategy, and outlook
  • Quantitative measures of the entity’s greenhouse gas emissions, which, for Scope 1 and 2 emissions of accelerated and large accelerated filers, would be subject to assurance
  • In the notes to audited financial statements, certain climate-related financial statement metrics and disclosures, including:
    • Disaggregated information on a financial statement line-item basis about transition activities and the impact of climate-related events
    • Information about estimates and assumptions used in financial statements
  • The entity’s climate-related targets and goals, scenario analysis performed, and transition plan, if any

Some of the proposed disclosures and related assurance requirements would be phased in over time based on filer status and the type of greenhouse gas emissions disclosure.

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Comment letters

Comments were originally due the later of May 20, 2022, (60 days from posting on SEC website) or 30 days from publication in the federal register. Comments are now due June 17, 2022, and many stakeholders are expected to choose to comment.

Comment letters

SEC proposes climate-related disclosures: A closer look

Dive deeper into the SEC’s 506-page proposal with our insights.

Contact us

Arjun Kalra
Arjun Kalra
Principal, Consulting, and Office Managing Principal, San Francisco/San Jose