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US SEC approuves climate related disclosure rules

March 7, 2024 – The United States Securities and Exchanges Commission adopted new rules requiring the companies it regulates to disclose climate-related information in their registration statements and annual reports.

The rules will require SEC registrants to disclose information on material climate-related risks, governance-related matters and risk management processes. Registrants may also have to make disclosures pertaining to the material financial consequences of weather-related events and natural conditions, as well as on the use of carbon offsets or renewable energy credits. Finally, the rules may also require companies to provide information on certain climate-related assumptions used to produce financial statements.

The rules will apply to SEC registrants, including foreign private issuers. Disclosures will be made in registration statements and Exchange Act annual reports filed with the Commission, and will be electronically tagged using Inline XBRL.

The rules will be phased in for all registrants, with the exact compliance date depending on the status (type) of the registrant. Notably, they also include a safe harbor from private liability for some disclosures, such as on scenario analysis, transition plans, the use of an internal carbon price, and targets and goals. The rules also include an accommodation that allows Scope 1 and/or Scope 2 emissions disclosure to be filed on a delayed basis if certain criteria are met.

For more details, see the official summary of the rules on the SEC website.

Responding to recent advancements in sustainability reporting globally, the SSE has launched a training workshop series on climate- and broader sustainability-related financial disclosures based on the standards of the International Sustainability Standards Board (ISSB). This workshop was developed in partnership with the International Finance Corporation (IFC) of the World Bank and the IFRS Foundation and is delivered via stock exchanges globally. The training is free of charge to the exchange and its market participants. It includes step-by-step practical guidance to help participants build the foundations needed to identify climate and sustainability-related issues, integrate them into strategy decision-making and governance processes, and measure progress and resilience. Find out more about this workshop here.