Adrian Johnson
TLDR:
Key points from the article:
- The SEC is set to vote on its long-awaited climate disclosure rule on March 6.
- The rule, originally proposed nearly two years ago, will require companies to disclose climate-related risks and financial metrics.
SEC to Vote on Climate Disclosure Rule
The Securities and Exchange Commission is scheduled to hold a vote on its long-awaited climate disclosure rule on March 6. The proposed rule, which has attracted thousands of comments, will require registrants to include certain climate-related disclosures in their registration statements and periodic reports. This includes information about climate-related risks that could impact their business, as well as certain climate-related financial statement metrics in audited financial statements.
Industry pushback has led the SEC to scale back the rule to exclude reporting on Scope 3 emissions from supply chains. Lawsuits from industry groups are expected once the rule is unveiled, similar to past SEC rules. Accounting firms like KPMG are eagerly awaiting the rule and are preparing for detailed analysis once it is released.
While the final rule may not align with the International Sustainability Standards Board’s climate disclosure standard, companies will likely not be able to use ISSB standards to comply with the SEC’s rule. The SEC’s rule references the Taskforce on Climate-related Financial Disclosure framework, while the ISSB has taken over responsibility for the TCFD framework from the Financial Stability Board.
In conclusion, the SEC’s upcoming vote on the climate disclosure rule is a significant development in corporate reporting requirements. Companies and accounting firms are preparing for the potential impacts of this new rule on financial reporting and disclosure practices.
