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SEC to Vote on Proposed Climate Disclosure Rules on March 6

S.J. Steinhardt
Published Date:
Mar 1, 2024

The Securities and Exchange Commission (SEC) will vote on its proposed climate-related disclosure rules on March 6, Reuters reported.

First proposed in March 2022, the rules aim to enhance and standardize climate-related disclosures about greenhouse gas emissions and climate-related risks that are reasonably likely to have a material impact on SEC registrants' businesses. The agency has said that such information is important to investors.

Current regulations do not impose common standards for climate-related disclosures. The SEC stressed the need for consistent and comparable information across companies, many of which produce climate information on their own terms.

"The information that it would require about a company's greenhouse gas emissions is critically important to investor decision-making," Washington advocacy group Better Markets recently wrote in a note urging the SEC to adopt the rules, Reuters reported.

The proposal has generated thousands of comments from interested parties. While reform advocates, environmental groups and Democratic legislators, support the rules, many companies and Republican lawmakers have said that the rules will be burdensome for companies. They are expected to bring legal challenges once the rules are finalized.

The SEC has not published a final draft of the rules, but it has dropped its most ambitious "Scope 3" plank which would have required companies to disclose emissions from their supply chains, Reuters reported on Feb. 23. That change could help the rules withstand court challenges, sources said.

The SEC has also eased requirements for disclosures of Scopes 1 and 2 emissions, pollution categories for which companies are directly responsible, people familiar with the matter told Reuters. While the initial proposal made such disclosures mandatory, the revised proposal would make them mandatory only if companies deem they are material, meaning in some instances they might not be reported at all, the people told Reuters.

The SEC would not comment on possible changes to regulations in development. "Based on the public feedback, the staff and the Commission consider possible adjustments to the proposals and whether it's appropriate to move forward to a final adoption," a spokesperson told Reuters.

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