In March, 2022, the Securities and Exchange Commission (SEC), in the United States, proposed a framework requiring companies to disclose information about climate-related risks.
While not yet finalised, the SEC has proposed to move forward on the following, with final details about its climate disclosure requirements expected to be announced later this year:
- Potential risks and the material impacts on companies, their business strategy and subsequent outlook, caused by climate change, generally in line with the Task Force for Climate-related Financial Disclosures (TCFD).
- Scope 1 and 2 greenhouse gas (GHG) emissions, along with Scope 3 – where Scope 3 targets are material or if the organisation in question has set a GHG emissions reduction target that includes supply-chain-related emissions.
- Qualitative and quantitative disclosures, relating to climate risk, including the financial impacts of both physical and transition risks on line items of the financial statements.
- Information about climate targets, goals and transition plans, where these exist.
- Governance of climate-related risks, both physical and transition, and related processes.
The SEC climate disclosure ruling is on the horizon – are you ready for the new rules?
Is your business equipped to understand and report on its exposure to climate risk? Now is the time to prepare for the SEC. Download our Securities and Exchange Commission climate risk disclosure paper for what you need to know ahead of the SEC disclosure ruling.