On March 6, 2024, Corporate Compliance Insight quoted Adrienne Gurley on the SEC’s new climate disclosure rules. According to the article, the SEC adopted a less robust version of its original proposal, which notably does not require highly contested Scope 3 emissions reporting.
“In addition to other regulatory regimes that may require Scope 3 emissions reporting, the question of materiality will demand a company’s attention to its downstream emissions,” Gurley explained. “Companies will maintain discretion as to what they consider material, but anything that has or is reasonably likely to have a material impact on its own business strategy, results of operations or financial condition is likely material and may trigger a disclosure obligation.”
“If an entity becomes aware of climate-related issues from a company along its supply chain, or even its end customer, they can’t just disregard it,” Gurley added. “They will have to decide whether that information is material, which is always important to the SEC when considering the information provided, or not provided, to investors.”
According to Corporate Compliance Insight, companies most affected by the new climate change reporting requirements have spent significant amounts of time preparing for the implementation of these rules.
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