Current:Home > StocksThe SEC wants companies to disclose how climate change is affecting them -AssetPath
The SEC wants companies to disclose how climate change is affecting them
View
Date:2025-04-14 15:02:50
Every year, public companies in the U.S. are required to provide investors and regulators with detailed data about their financial performance and the risks they face. Soon, they may also have to disclose information about how they are dealing with climate change.
The U.S. Securities and Exchange Commission on Monday formally proposed new rules that would for the first time require businesses to report their greenhouse gas emissions, along with details of how climate change is affecting their businesses.
Though some companies such as Apple have voluntarily reported climate-related information, until now there have not been any standardized requirements imposed by the SEC.
In a statement of support for the proposed rules, SEC Chair Gary Gensler said the regulator is responding to demand from investors and companies given the increased push for information on the risks climate change-related events pose to businesses.
"Our core bargain from the 1930s is that investors get to decide which risks to take, as long as public companies provide full and fair disclosure and are truthful in those disclosures," Gensler said. "That principle applies equally to our environmental-related disclosures."
The rules would be phased in
If the regulators approve the rules, companies would be required to provide climate-related information when they register as public companies with the SEC, and also in annual filings.
Companies would need to disclose potential risks to their operations from climate-related events such as having operations in an area facing the risk of rising sea levels.
The rules would also require companies to provide data on their own greenhouse gas emissions and also on how much energy they consume. These are known as "Scope 1" and "Scope 2" emissions, respectively.
"Scope 3" emissions have proved to be more controversial. They are emissions generated by a company's suppliers and customers. Many companies and trade groups, including the U.S. Chamber of Commerce, have opposed mandated reporting of Scope 3 emissions saying it would be too burdensome and complicated to estimate emissions across a company's operations.
Under the rules unveiled on Monday, the SEC says it would put the onus on companies to determine whether their Scope 3 emissions are "material" — meaning the data would be an important factor to know for an investor.
Investors and the SEC itself would be able to challenge a company's assessment of what counts as material information. Smaller companies would be exempted from reporting their Scope 3 emissions.
The rules would be phased in in stages with an additional phase-in period for Scope 3 disclosures. That means companies may not have to file information on climate risk until 2024 at the earliest.
The public will have 60 days to weigh in on the proposed rules.
veryGood! (42)
Related
- The Daily Money: Spending more on holiday travel?
- 'Hidden fat' puts Asian Americans at risk of diabetes. How lifestyle changes can help
- Honolulu Sues Petroleum Companies For Climate Change Damages to City
- A Warming Climate is Implicated in Australian Wildfires
- Mets have visions of grandeur, and a dynasty, with Juan Soto as major catalyst
- Pfizer warns of a looming penicillin supply shortage
- There’s No Power Grid Emergency Requiring a Coal Bailout, Regulators Say
- A Warming Climate is Implicated in Australian Wildfires
- EU countries double down on a halt to Syrian asylum claims but will not yet send people back
- Just hours into sub's journey, Navy detected sound consistent with an implosion. Experts explain how it can happen.
Ranking
- Why members of two of EPA's influential science advisory committees were let go
- The Best Memorial Day Sales 2023: Sephora, Nordstrom Rack, Wayfair, Kate Spade, Coach, J.Crew, and More
- Vanderpump Rules' Tom Sandoval Doesn’t Want to Hear the Criticism—About His White Nail Polish
- Lewis Capaldi's Tourette's interrupted his performance. The crowd helped him finish
- Brianna LaPaglia Reveals The Meaning Behind Her "Chickenfry" Nickname
- FDA advisers back updated COVID shots for fall vaccinations
- Peru is reeling from record case counts of dengue fever. What's driving the outbreak?
- Zayn Malik Sends Heartfelt Message to Fans in Rare Social Media Return
Recommendation
North Carolina trustees approve Bill Belichick’s deal ahead of introductory news conference
These Are the Toughest Emissions to Cut, and a Big Chunk of the Climate Problem
Linda Evangelista Says She Hasn't Come to Terms With Supermodel Tatjana Patitz's Death
American Climate Video: Al Cathey Had Seen Hurricanes, but Nothing Like Michael
Could your smelly farts help science?
Clean Energy Could Fuel Most Countries by 2050, Study Shows
California Utility Says Clean Energy Will Replace Power From State’s Last Nuclear Plant
21 of the Most Charming Secrets About Notting Hill You Could Imagine