Compliance and Regulatory Alerts | 04-12-22
SEC Proposes New Disclosure Rules on Climate Change
In a broad new rule proposal, the Securities and Exchange Commission would require both domestic and foreign registrants to provide climate-related information in their filings and periodic reports. The proposed rule would require disclosure of “climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition.” A registrant would be required to first assess and then disclose its greenhouse gas emissions and other “climate-related financial metrics” in their audited financial statements. The proposed rule would also require a company’s board and management to provide information on its climate change risk management and risk mitigation processes.
The SEC is proposing a gradual phase-in period for rule compliance considering a registrant’s filer status, and their ability to assess the risks and comply with climate-related financial metrics. The short comment deadline is May 20, 2022, or thirty days after publication of the rule in the Federal Register – whichever is longer.
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