SEC Proposes Landmark Rules to Enhance and Standardize Climate‑Related Disclosures

On March 29, 2022, Cravath prepared a memo for its clients entitled “SEC Proposes Landmark Rules to Enhance and Standardize Climate‑Related Disclosures,” which reviews the agency’s proposed new rules, released on March 21, 2022, with broad‑sweeping requirements for public companies (both domestic and foreign private issues) to include substantial climate‑related disclosures in registration statements and periodic reports. These proposed rules, if adopted, are likely to significantly increase related data collection and monitoring obligations and costs, and will mandate new governance, strategy and risk management disclosures, GHG emissions data disclosures and reporting, and the reporting of certain climate‑related financial statement metrics in audited financial statements. The memo concludes that while the proposed rules may face legal challenge, companies should focus on establishing controls and procedures to collect data for the potential disclosures.

Please click here to read the memo.