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