SEC Adopts First Climate Disclosure Rules for Public Companies

The new regulations require reporting of climate-related risks and Scope 1 and 2 emissions, marking a significant step towards corporate transparency.

The U.S. Securities and Exchange Commission (SEC) has approved the nation's first climate disclosure rules, requiring publicly listed companies to report climate-related risks and, for larger companies, their Scope 1 and 2 greenhouse gas emissions.
The new rules have been scaled back from their original proposal, notably excluding the requirement for companies to report Scope 3 emissions, which are generated throughout a company's supply chain.
Despite the reduction in scope, the rules represent a significant step towards transparency in corporate climate-risk disclosures, with implementation set to begin in 2025.
Critics argue that the rules have been watered down due to pressure from conservative politicians and business interests, potentially undermining their effectiveness in addressing climate change.
Comparatively, the EU and California have enacted more stringent climate disclosure requirements, highlighting a global trend towards greater transparency in environmental impact reporting.