SEC proposes new ruling on certain climate-related disclosures
21 March 2023 US
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The U.S. Securities and Exchange Commission (SEC) has proposed rule changes that would require registrants to include certain climate-related disclosures in their registration statements and periodic reports.
If passed, the ruling would mean registrants would be obligated to report climate-related risks that are “reasonably likely” to have a material impact on their business, results of operations, or financial condition.
They would also have to report certain climate-related financial statement metrics in a note to their audited financial statements.
In addition, the required information would include disclosure of a registrant’s greenhouse gas emissions, if any identified climate-related risks are likely to affect the registrant’s business model, and the impact of climate-related events (severe weather events) on the line items of a registrant’s consolidated financial statements.
For registrants that already conduct scenario analysis, have developed transition plans, or publicly set climate-related targets or goals, the proposed amendments would require certain disclosures to enable investors to understand those aspects of the registrants’ climate risk management.
The proposed rules would include a phase-in period for all registrants, with the compliance date dependent on the registrant’s filer status and an additional phase-in period for emissions disclosure.
The proposing release will be published on SEC.gov and in the Federal Register. The comment period will remain open for 30 days after publication in the Federal Register, or 60 days after the date of issuance and publication.
In recent days, President Joe Biden has reversed restrictions on retirement plans considering ESG factors.
New rules will allow the Employee Retirement Income Security Act (ERISA) retirement plan fiduciaries to consider ESG factors when making investments or creating offerings.
ERISA protects the assets of millions of Americans so that funds placed in retirement plans during their working lives will be there when they retire.
If passed, the ruling would mean registrants would be obligated to report climate-related risks that are “reasonably likely” to have a material impact on their business, results of operations, or financial condition.
They would also have to report certain climate-related financial statement metrics in a note to their audited financial statements.
In addition, the required information would include disclosure of a registrant’s greenhouse gas emissions, if any identified climate-related risks are likely to affect the registrant’s business model, and the impact of climate-related events (severe weather events) on the line items of a registrant’s consolidated financial statements.
For registrants that already conduct scenario analysis, have developed transition plans, or publicly set climate-related targets or goals, the proposed amendments would require certain disclosures to enable investors to understand those aspects of the registrants’ climate risk management.
The proposed rules would include a phase-in period for all registrants, with the compliance date dependent on the registrant’s filer status and an additional phase-in period for emissions disclosure.
The proposing release will be published on SEC.gov and in the Federal Register. The comment period will remain open for 30 days after publication in the Federal Register, or 60 days after the date of issuance and publication.
In recent days, President Joe Biden has reversed restrictions on retirement plans considering ESG factors.
New rules will allow the Employee Retirement Income Security Act (ERISA) retirement plan fiduciaries to consider ESG factors when making investments or creating offerings.
ERISA protects the assets of millions of Americans so that funds placed in retirement plans during their working lives will be there when they retire.
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