WilmerHale
MONTH-IN-BRIEF (Mar 2024)
SEC Adopts Long-Awaited Climate-Related Disclosure Rules
By Tylandra Callands, J.D. Candidate, Class of 2024, Mitchell Hamline School of Law
The Securities and Exchange Commission (SEC) adopted final climate-related disclosure rules on March 6, 2024, which the SEC indicated are designed to enhance and standardize climate-related disclosures.
Key elements of the new rules include:
- Disclosure of climate-related risks affecting or likely to affect the company’s business strategy, operations, or financial condition.
- Reporting on the material impacts of climate risks on the company’s strategy, business model, and outlook.
- Descriptions of actions taken to mitigate or adapt to material climate risks, including quantitative and qualitative details of expenditures and impacts on financial estimates.
- Disclosure of the board’s oversight and management’s role in addressing climate-related risks.
- Information on climate-related targets or goals and their material effects on the company.
- For certain filers, detailed reporting on Scope 1 and Scope 2 emissions, including assurance reports.
- Financial statement notes disclosure as to the costs and impacts of severe weather events and other natural conditions, as well as carbon offsets and renewable energy credits.