SEC Issues Guidance on Disclosure Related to Climate Change
On January 27th, the SEC issued a ruling “to provide public companies with interpretive guidance on existing SEC disclosure requirements as they apply to business or legal developments relating to the issue of climate change.” The “interpretive guidance” (which was issued on a party line 3-2 vote) does not make any assertions about climate change or its impact on the environment. According to SEC Chairman Mary Schapiro "We are not opining on whether the world's climate is changing, at what pace it might be changing, or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics…Today's guidance will help to ensure that our disclosure rules are consistently applied."
The guidance offers “the following areas as examples of where climate change may trigger disclosure requirements”:
- Impact of Legislation and Regulation
- Impact of International Accords
- Indirect Consequences of Regulation or Business Trends
- Physical Impacts of Climate Change
According to the SEC press release, “The Commission's interpretive releases do not create new legal requirements nor modify existing ones, but are intended to provide clarity and enhance consistency for public companies and their investors.” A press release from Ceres and the EDF details other major policy actions over the past year requiring more robust climate risk disclosure across various industry sectors.