The US Securities and Exchange Commission has proposed amendments to current rules that would require foreign and domestic registrants to disclose climate-related information in their periodic reports and registration statements. The purpose of the proposed rules is to enhance and standardize climate-related risk disclosures.
The disclosures required by the proposed rules would cover, among others:
- The way the registrant identifies, assesses and manages climate-relate risks, and how such processes are integrated into overall risk management strategies;
- Oversight of climate-related risk by the registrant’s board and management, and governance thereof;
- Whether a transition plan has been adopted as part of a registrant’s risk management strategy, and if so, what does the plan entail;
- The effect of climate-related events on a registrant’s financial statements, estimates and assumptions;
- The carbon footprint and emissions of a registrant’s business, and;
- Climate-related goals and the registrant’s progress toward meeting those goals.
The rules specify the types of filings that would be required to include climate-related disclosures, and also provide for a phase-in period for different classes of registrants and filers.
The proposed rules will be open for public comment for at least 60 days.