A Workiva view on what to look for in enhanced SEC climate disclosures
A new post from Workiva’s Steve Soter offers his take on forthcoming enhanced climate disclosure rules, expected from the US Securities and Exchange Commission (SEC). It is too early to tell exactly what shape these proposals will take, but he and his teammates have drawn on public consultation feedback, statements from the SEC, and changes in the international landscape to offer some best-guess suggestions about what to expect.
He anticipates mandatory quantitative greenhouse gas disclosures – at least for Scope 1 and Scope 2 covering emissions from company-owned assets and energy purchases respectively, and perhaps also Scope 3 for emissions along the value chain – and disclosure of assets at risk. He also predicts the adoption of one of the existing global environmental, social and governance (ESG) reporting frameworks, as well as guidance on determining materiality.
On the other hand, Steve does not expect to see mandates on third-party assurance, non-environmental aspects of ESG, or – yet – machine-readable data. He also advances a number of other questions to look out for, such as possible exemptions for smaller companies, industry-specific requirements, and the planned timeline. He concludes by reminding us that the SEC proposal will not be the finish line for climate disclosures: a public comment period will follow, and international developments towards a global standard continue.
Do you agree with these predictions, and what are your priorities for the SEC’s new climate rules? Let us know what’s on your mind when it comes to ESG!
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