SEC Proposes Climate Disclosure Rules
The SEC has proposed reporting rules for climate disclosures, with a comment period running through mid-June 2022. While much has been written on the details, the summary take-away is this: regulation is coming, and the initial focus is climate risk. The proposed rules align with the TCFD (Task Force on Climate Related Financial Disclosure) frameworks, and underpinning the effort is the knowledge that climate risk is financial risk. Quantifying, reporting, and mitigating this risk, therefore, is a foundational disclosure that will benefit investors, shareholders, employees, and the reporting company’s broader constituencies. We will discuss various aspects of the rules as they evolve, but for now, our advice to clients is to prepare with robust tools and infrastructure that will embed this reporting in the existing processes.