Imperatives for Climate Change-Related Disclosures in SEC Filings Continue to Mount
Companies’ exposure to the impact of climate change and related legislation and rulemaking continues to rapidly evolve. It is important to understand that climate change-related exposures are expected to affect most companies, not just those in industry sectors that may be required to limit their greenhouse gas, or GHG, emissions. Anticipated changes to the physical environment, rising consumer demand for "sustainable" products, potential supply chain disruptions, and other climate change-related impacts have potential relevance to many companies’ financial and competitive forecasts.
It is anticipated that the SEC may soon explicitly require companies to make specific climate change-related disclosures in their filings. In anticipation of SEC action, this advisory discusses (1) the sources of pressure most likely to cause the SEC to adopt rules specifically requiring disclosures relating to exposures associated with climate change; (2) the current SEC rules requiring disclosures of material information concerning the nature of certain environmental impacts; (3) disclosures that a company may be required to make in the future regarding climate change-related exposures; and (4) the steps that companies may consider taking to prepare for these anticipated new rules.
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