November 03, 2021 By Dan Clevenger
Categories: Climate Change , Energy , Environmental Impact Assessment , Climate Response , ESG
With the third quarter coming to a close and year-end reporting just around the corner, public companies should be giving careful thought to the evolving landscape for climate-related disclosures. While it did not promulgate any new rules in 2021 regarding these disclosures, the SEC has been actively commenting on climate change disclosures, and new rules are almost certainly on the way.
Since 2010, the SEC has made clear that its existing disclosure regime requires issuers to assess and, if material, disclose the impact of and risks related to climate change and related legislative and regulatory responses. Starting in 2020 and continuing through 2021, the SEC has further emphasized that climate and other ESG-related risks are a major priority:
The foregoing, along with speeches made by Chair Gensler and Commissioner Lee, among others, serve as a reminder to public companies that even without additional rulemaking, the SEC is intensely focused on climate-related disclosures. As they approach the 2022 reporting season, public companies should conduct a focused review of the climate change-related risks they face, including risks posed by proposed legislative and regulatory responses to climate change, and, if material, disclose them in their SEC filings. Additionally, companies that release a corporate social responsibility (CSR) or similar report should coordinate the preparation of that report with the preparation of their SEC filings to ensure consistency between them and that all claims made in a CSR report can be supported with the same degree of confidence as statements made in an SEC filing.