SEC Proposes ESG Reporting for Publicly Traded Companies

The SEC has issued a proposed rule that would require publicly traded companies to include certain climate-related disclosures in their registration statements and periodic reports, such as the annual Form 10-K.

The proposed rule would in part require disclosure about the following.

  • The registrant’s governance of climate-related risks and relevant risk management processes.
  • How any climate-related risks identified by the registrant have had or are likely to have a material impact on its business and consolidated financial statements.
  • How any identified climate-related risks have affected or are likely to affect the registrant’s strategy, business model, and outlook.
  • The impact of climate-related events (such as severe weather and other natural conditions) and transition activities on the line items of a registrant’s financial statements and estimates used in financial statements.

The rule would also require disclosures about direct greenhouse gas admissions and indirect emissions from purchased electricity or other forms of energy, as well as disclosure of greenhouse gas emissions from upstream and downstream activities in its value chain if material or if the registrant has set an emissions target. Accelerated filers would be required to include an attestation report from an independent attestation service provider covering emission disclosures.

A fact sheet provides an overview of requirements and the applicable phase-in period—depending on the type of registrant and type of emission disclosure required. The comment period will remain open for the longer of 1) 30 days after publication in the Federal Register, or 2) 60 days after the date of issuance and publication on