The New SEC Climate Disclosure Rule Will Drive Risk Mitigation and Value Creation

The U.S. Securities and Exchange Commission finalized a rule on March 6, 2024, mandating disclosure by issuers of their climate-related impacts, strategies, and greenhouse gas (GHG) emissions. This rule seeks to make climate-related disclosures more transparent and comparable, aiding investors in making informed decisions. The final rule aligns with the Task Force on Climate-related Financial Disclosure (TCFD), aiming for consistent and comprehensive disclosures across industries. Issuers must now prepare for new compliance challenges and opportunities to double down on their sustainability efforts.

Key takeaways and deadlines include:

• Disclosure Requirements: Issuers must share detailed information on their climate-related impacts, GHG emissions, risks, and how climate change affects their strategy and financial performance.
• Preparation and Compliance: Coordination among experts in legal, accounting, and ESG fields is essential, along with rigorous data management and verification processes.
• Effective Date: The rule kicks in 60 days after it's officially published, with companies starting to report in fiscal year 2025. This means companies need to start preparing now to meet these requirements.

Click here to read the full posting on the Stoel Rives Environmental Law blog.