SEC Issues Final Rule On Climate-Related Disclosures To Investors

On March 21, 2022, the Securities and Exchange Commission proposed a rule requiring registrants to disclose information relating to climate risk that is "reasonably likely to have material impacts on its business or consolidated financial statements," and (ii) "GHG emissions metrics that could help investors assess those risks."¹ Two years and 24,000 comment letters later, on March 6, 2024, the SEC issued its final rules "to enhance and standardize climate-related disclosures by public companies and in public offerings."²

The 886-page final rules will require disclosures relating to (i) climate-related risks that have, or are reasonably likely to, materially impact a registrant's business strategy, results of operations, or financial condition and (ii) severe weather events and other natural conditions.³ According to SEC Chair Gary Gensler, the final rules are issued in the spirit of a basic bargain: "Investors get to decide which risks they want to take so long