SEC Floats Mandatory Disclosure of Climate-Change Risks, Emissions

Paul Kiernan

This article by Paul Kiernan appeared in The Wall Street Journal on March 21, 2022.

U.S. regulators proposed stringent requirements for publicly traded companies to report information on greenhouse-gas emissions and risks related to climate change, in one of the Biden administration’s potentially most significant environmental actions to date.

Members of the Securities and Exchange Commission voted 3-1 to issue the proposal, which will be open for public comment for at least two months before the agency will begin work on a final rule. Commissioners voted along party lines, with all three Democrats backing the proposal.

The proposal would force publicly traded companies to report greenhouse-gas emissions from their own operations as well as from the energy they consume, and to obtain independent certification of their estimates. In some cases, firms also would be required to report greenhouse-gas output of both their supply chains and consumers, known as Scope 3 emissions. Companies would have to include the information in SEC filings such as annual reports.

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