The SEC's proposed changes will affect more than U.S. public companies — all companies listed on a U.S. public exchange will be affected as well. Discover more about the U.S. SEC’s proposed rules for mandatory climate risk disclosures.
U.S. public companies may face a dramatically different regulatory landscape in 2023 if the Securities and Exchange Commission (SEC) adopts rules they proposed in March 2022.
Many legal and regulatory experts expect the SEC to finalize and adopt some version of its initial proposal before the end of 2022 although it is possible the SEC may request another round of comments. The SEC received over 1,300 comments in the first round and may want additional feedback before releasing its final rules.
Despite these variables, the SEC climate disclosure rule is a sign of enforcement changes, considering settled charges by the SEC against an investment company about ESG disclosures, and current charges against a mining company for safety claims made to investors prior to a dam collapse.
Regardless of the SEC’s final timeframe, legal experts advise companies to start preparing for stricter disclosure requirements and regulatory scrutiny. This advice applies to both domestic registrants and foreign private issuers, the SEC said in its publication, “The Enhancement and Standardization of Climate-Related Disclosures for Investors” (Securities and Exchange Commission, [Release Nos. 33-11042; 34-94478; File No. S7-10-22] RIN 3235-AM87).
In this guide, you will learn the following:
- The frameworks under consideration by the SEC
- The most common set of non-financial metrics
- The expected requirements based on SEC guidance
- Suggested building blocks to prepare for possible rule changes
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