SEC Pushes For More Robust Climate Disclosures

The Securities and Exchange Commission (SEC) is poised to make good on its promise to ramp up enforcement efforts in relation to climate risk and environmental, social, and governance (ESG) disclosures. Last week, the SEC's Division of Corporate Finance (Division) published a sample of a letter the agency may send to public companies asking for more information about climate change-related risks and ESG disclosures in their public filings. Earlier this year, in March 2021, the SEC announced that the agency had established an enforcement task force focused on identifying gaps in climate and ESG disclosures under existing requirements. In parallel, the SEC is considering new requirements to update those standards, which we now expect to occur in late 2021 or early 2022. Under Chair Gensler, public companies face increasing scrutiny at the SEC with respect to climate and ESG disclosures and should review their filings to ensure compliance.