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SEC considers modification of proposed climate disclosure rules (2023)
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The Wall Street Journal on February 3 reported that Securities and Exchange Commission (SEC) Chairman Gary Gensler and his supporters on the commission might be considering reducing the amount of climate data publicly traded companies will have to disclose under its proposed climate rules:
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The Securities and Exchange Commission is considering a softening of planned rules requiring companies to disclose the effects of extreme weather and other costs related to global warming when the regulator completes its climate-change proposals, people close to the agency said. The Wall Street regulator is looking again at the financial reporting aspect of the climate-disclosure plan it issued last year, following pushback from investors, companies and lawmakers, the people said. The final version of the SEC rules, expected this year, will likely still mandate some climate disclosures in financial statements, according to the people close to the agency. But the commission is weighing making the requirements less onerous than originally proposed, the people said, such as by raising the threshold at which companies must report climate costs. Gary Gensler‘s climate proposals would require publicly traded companies to disclose the greenhouse-gas emissions from their operations, energy consumption and—in some cases—suppliers and customers. The climate package, a signature measure of Mr. Gensler’s SEC leadership, is expected to face legal challenges from industry groups or Republicans. Dialing back the financial-reporting rules could bolster the agency’s legal defense by allowing it to demonstrate that it has listened to business concerns and reduced the forecast multibillion-dollar annual cost of the new system. Evan Williams, senior director at the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness, said the SEC needs to adjust the proposal if it wants to produce “a court-durable final rule.” The proposed reporting rules would require public companies to include a raft of climate data in their audited financial statements. The mandated disclosures cover everything from costs caused by wildfires to the loss of a sales contract because of climate regulations, such as a cap on carbon emissions. Companies would have to analyze climate-related costs and risks for each line item of their financial statements, such as revenue, inventories or intangible assets. Any climate costs that are 1% or more of each line item total would have to be reported…. SEC officials have been taken aback by the strength of opposition to their financial- reporting proposals, people close to the agency said. Many companies said the changes would bring high costs, complexity and potential unintended consequences.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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