SEC May Change Climate Risk Disclosure Requirements | Industry Pushback
News & Alerts
Brief Introduction
In 2022, the SEC proposed new disclosure requirements related to climate change risk for firms. They argue that firms should be required to disclose what the impact of climate change could have on their business financials.
What is Being Considered?
- The current proposal has a 1% rule requiring that any expected impact from climate change on would need to be disclosed it affects any line item on a corporate financial statement.
- Numerous firms have pushed back, claiming that this requirement would create a massive and expensive burden on the financial industry.
- Concerns were raised that any type of disclosure on possible climate change impact would be highly speculative and incredibly hypothetical. This would cause disclosures to be unreliable.
- It is speculated that the 1% requirement could be increased or may be removed from the proposal altogether.
Vigilant’s Final Conclusion
There have been no official changes to the proposal that is expected to be finalized in 2023. However, it is expected that some changes may occur as industry experts report that these proposals may receive significant legal pushback in court.
Vigilant, bringing decades of compliance experience and deep industry insight, is prepared to help firms prepare for any of the over twenty rules expected to be finalized in 2023.