Threading The Needle: The US Securities And Exchange Commission's Final Climate-Related Disclosure Rules

On 6 March 2023, by a 3-2 vote of the Commissioners split along party lines, the US Securities and Exchange Commission (SEC) adopted "The Enhancement and Standardization of Climate-Related Disclosures for Investors" final disclosure rules. No other SEC rulemaking in recent history has received as much attention as the climate-related disclosure rules. When preparing the final rules, the SEC had the onerous task of not only reviewing over 24,000 comment letters but crafting the final rules so that they could withstand the inevitable legal challenges while also trying to satisfy growing demands for climate-related disclosures.

The final rules seek to address the question of what climate-related disclosures, including climate-related risks faced by a company, should be publicly disclosed, a question that has been the subject of significant public attention and political controversy. The final rules seek to thread the needle between the two sides of this debate by