Last March, the Securities and Exchange Commission (SEC) voted to approve a comprehensive package of rule changes that would require public companies to report detailed information on climate-related risks and greenhouse gas emissions. The SEC had hoped to finalize these rules by October and begin implementing them in early 2023. But the volume of public comment — along with a June 2022 Supreme Court ruling threatening the agency’s regulatory authority — have extended this timeline into the new year.
The SEC’s move was no surprise: in July 2021, chairman Gary Gensler said that “investors increasingly want to understand the climate risks of the companies whose stock they own or might buy,” and that “consistent, comparable, and decision-useful disclosures” could help. Defenders of the proposed changes argue that climate-related disclosures must be applied to public companies, given the existential risks associated with climate change. Critics counter with concerns about the costs of compliance and mission creep at the SEC—a Depression-era regulatory agency originally established to protect investors. The critics are correct.
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