The Securities and Exchange Commission voted 3-2 today to approve new climate disclosure requirements for publicly traded companies. Among other things, the rule requires companies to disclose material climate-related risks, activities to mitigate or adapt to such risks, and information about the board’s and management’s oversight of risks. The final rule also require disclosure of Scope 1 and Scope 2 greenhouse gas emissions by certain large companies, although they remove a requirement from the original proposal to require companies to report Scope 3 emissions, which include “financed emissions” that are within bank lending portfolios. Finally, companies must disclose capitalized costs, expenditures expensed, charges and losses incurred as a result of “severe weather events and other natural conditions.”
The SEC first began exploring a climate disclosure rule two years ago. In that time, the agency received more than 24,000 comment letters on the proposal, according to the agency. The final rule includes a phased-in compliance period starting in 2026, with the compliance date dependent on the company’s filer status and the content of the disclosure.
