SEC Adopts Final Climate Disclosure Rules for Public Companies

The Securities and Exchange Commission adopted final rules requiring public companies to disclose climate-related risks, greenhouse gas emissions, and the financial impacts of severe weather events in their annual reports and registration statements. The rules were significantly scaled back from the initial proposal.

The final rules require disclosure of material climate-related risks, risk management strategies, targets and goals, and Scope 1 and Scope 2 greenhouse gas emissions (for larger companies, subject to assurance requirements). The most controversial Scope 3 emissions requirement was dropped from the final rule.

Compliance begins with fiscal year 2025 for large accelerated filers. Multiple legal challenges have been filed, and the rules have been stayed pending judicial review by the Eighth Circuit Court of Appeals.