On March 6, 2024 the Securities Exchange Commission (SEC) issued their final rule requiring the standardized disclosure of climate-related risks, including related governance, strategy, risk management, and metrics and targets. SEC Chair Gary Gensler noted that the final rule provides “investors with consistent, comparable, decision-useful information, and issuers with clear reporting requirements.”
Originally proposed in March 2022, the final rule scales back some of the initially proposed requirements. The most notable changes from the March 2022 draft rule to the March 6, 2024 announcement:
- Scope 3 emission disclosure left out of SEC final rule in the face of considerable corporate backlash
- Disclosure timelines pushed back for all elements
- Disclosure of Scope 1 and 2 required as part of a company’s Second Quarter 10-Q report, allowing additional time for annual emissions reporting
- Removed requirement to evaluate financial statement impacts on a line-item-by-line-item basis
The below table summarizes the new reporting timelines.
RE Tech will continue analyzing the intricate details of how the updated rules may impact your sustainability program moving forward and provide additional details in future weeks. If you and your teams have questions, RE Tech would be happy to discuss the Impact of this ruling with you.