U.S. companies must tell public about their climate risks, SEC rules
The Securities and Exchange Commission on Wednesday voted to approve new climate risk disclosure rules.
Companies will have to start telling the public about how climate change could hit their bottom lines — just not with as much detail as some had hoped.
The Securities and Exchange Commission on Wednesday voted to approve new climate risk disclosure rules, a significant shift that will require many companies to include information about their emissions along with the other material risks that U.S. businesses must detail to the public.
The rules, some climate advocates say, were watered down after they faced scrutiny from some business leaders. But others say they could still mark a moment of awakening for investors to the financial risks of climate change.
The new rules, which was approved by commissioners in a 3-2 vote, will require large public companies to disclose some aspects of their carbon footprints and also lay out for investors how climate change could put aspects of their businesses at risk. In comparison to earlier draft versions of the rules, the finalized rules will require fewer businesses to comply and also won’t require most indirect carbon emissions to be disclosed.
Some large companies already voluntarily publish such information. The new rules could help reduce greenwashing, provide a common standard for disclosures and force large companies to be more transparent, said Cynthia Hanawalt, the director of climate finance and regulation at Columbia University’s Sabin Center for Climate Change Law.
Rating: 5