New document: SEC proposes first-ever climate crisis disclosure rule for public companies

In a move long sought by environmentalists, the Securities and Exchange Commission is proposing regulatory revisions to mandate that public companies disclose some of the financial risks that they face due to the climate crisis, including their own greenhouse gas emissions.

The proposed rule, released March 21 ahead of its publication in the Federal Register, would require a company to disclose information on its climate-related risks and processes for managing those risks; identify how any climate-related risks might have a material impact on the company’s financial statements; detail the ways that such risks are affecting its business plans; and highlight the impact of severe weather and other climate-related events on line items in the company’s financial statements, including estimates and assumptions.

Sustainability nonprofit Ceres and watchdog group Public Citizen have long advocated for the SEC to issue a mandatory climate disclosure rule for public companies. The two organizations last month released a poll showing 87 percent of Americans support such a regulation.

Businesses opposed to climate disclosure mandates will have the opportunity to push back on the regulation in their upcoming written comments, although environmentalists and others are expected to weigh in with comments supporting the plan and seeking even more disclosure.

The SEC will take public comment on the proposal for 30 days after its publication in the Federal Register, or for 60 days until May 9, whichever is longer.