On March 6, 2024, the US Securities and Exchange Commission ("SEC") finalized new climate disclosure rules for public companies, mandating comprehensive reporting on climate-related risks and their impacts on business operations. In a divided 3-2 vote, the Commission established requirements for companies to disclose operational impacts, risk management processes, greenhouse gas emissions, and climate-related targets in their annual reports and registration statements.
Significant changes from earlier proposals include the elimination of Scope 3 emissions reporting and a focus on materiality to reduce burdens on smaller companies. Following legal challenges, the SEC has implemented a stay on the rules pending court review, leaving the effective date uncertain.
This article explores the details of the new requirements, the rationale behind the changes, and the implications for corporate transparency in addressing climate risks.
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