SEC Adopts Final Rules On Climate-Related Disclosures

On March 6, 2024, in a 3-2 vote along party lines, the SEC adopted the long-awaited final rules on climate-related disclosures. The proposed rules faced intense public scrutiny over the last two years, with the SEC receiving more than 24,000 comment letters.

The final rules are scaled back in many respects from the March 2022 proposed rules. Most notably, the changes include (1) the elimination of the proposed requirement to disclose Scope 3 greenhouse emissions ("emissions"), (2) the limitation of certain requirements to large accelerated filers and accelerated filers (such as Scope 1 and Scope 2 emissions disclosure and related attestation reports), (3) an accommodation that allows Scope 1 and Scope 2 emissions disclosure to be filed on a delayed basis each year, (4) a less prescriptive approach to climate-related risk disclosure, (5) removal of the requirement to disclose climate expertise of directors and (6) a narrowing of financial statement disclosure