SEC Climate Disclosure Rule

Summary: The Securities and Exchange Commission today adopted a slimmed-down final version of its rule to enhance and standardize climate-related disclosures by public companies and in public offerings. The vote to adopt the rule, which dropped Scope 3 and scaled back Scope 1 and 2 requirements, was 3-2 along party lines, and it drew criticism from both conservatives and progressives. You can read the fact sheet here and press release here.

• Scope 1 (greenhouse gasses directly emitted by a company) and scope 2 (emissions from fuel/energy a company buys) requirements have been scaled back and will now also be phased in. Companies can use the materiality standard in deciding whether to report direct emissions. The final rules would require disclosure of Scope 1 and/or Scope 2 greenhouse gas (GHG) emissions on a phased-in basis by certain larger registrants when those emissions are material.