SEC extends comment period on climate risk consultation

13 May, 2022

Deadline for comments on The Enhancement and Standardization of Climate-Related Disclosures for Investors, now 17 June 2022.

The Securities and Exchange Commission (SEC) has extended the comment period for proposals that would require public companies to disclose climate-related information in their financial statements and annual reports.  

The US regulator said the deadline for comments on The Enhancement and Standardization of Climate-Related Disclosures for Investors will now be 17 June 2022. 

This was originally set for 20 May 2022. 

The rules would require companies to disclose climate-related risks expected to have a “material impact” on its business, operations, or financial stability, and would include emissions disclosures.  

Companies would be required to reveal information covering Scope 1 direct GHG emissions, indirect emissions (Scope 2), and disclosures on upstream and downstream activities across their entire value chains (Scope 3).  

Small companies are exempt from disclosing information on Scope 3 emissions.  

The proposals define “climate-related metrics” and aim to mandate companies to reveal how they integrate climate risks and opportunities in their governance and corporate strategies. 

The SEC amendments follow an executive order issued by President Joe Biden to advance climate policy. 

President Biden has already been active on this front, instating Gary Gensler as chair of the regulator and encouraging the reversal of policies brought in under the Trump administration – many of which were criticised by climate change activists.  

Regulators around the world are pressuring businesses and financial institutions to publish information on their climate impacts, including targets for reducing carbon emissions in line with Paris Agreement goals. 

In the UK, the Financial Conduct Authority (FCA) published rules last year mandating most listed companies, asset managers, life insurers, and pension providers, to disclose their climate impacts in financial reports and to investors, beginning from accounting periods starting 1 January 2022.  

Since December 2020, UK companies listed on the London Stock Exchange (LSE) premium segment have been mandated to make climate disclosures in line with the Task Force on Climate-Related Financial Disclosures (TCFD).