SEC Posts Sample Letter on Climate Change Disclosure
September 29, 2021 at 05:00 AM EDT
By: Steve Soter
The Securities and Exchange Commission has posted a sample letter highlighting potential disclosures that public companies should consider related to climate change.
Commission staff members are in the middle of developing a proposal for a mandatory climate risk disclosure rule, which we should see in the coming weeks. The sample letter posted Wednesday is a signal that the SEC intends to build on its 2010 climate disclosure guidance, which public companies should have been following all along.
If you had questions about how to apply the 2010 guidance, you might feel simultaneously grateful and nervous about the sample letter. The good news is that the letter provides a convenient summary for considerations on applying the 2010 guidance. The bad news is that the SEC just fired a shot across the bow to indicate, in no uncertain terms, that you might be missing a few things in your current disclosures.
Across regulators, investors, and other stakeholders, interest in reliable environmental, social, and governance (ESG) reporting has been growing dramatically on both sides of the Atlantic. The European Union has already made swift progress through its recent Corporate Sustainability Reporting Directive (CSRD) proposal, and we’re anxiously awaiting an SEC proposal on additional climate change disclosures. In the meantime, regulators are closely watching existing disclosures, including those potentially affected by Wednesday’s sample letter. U.S. authorities are investigating Deutsche Bank AG’s asset-management arm, whose former head of sustainability said it wasn’t quite living up to public statements on ESG, The Wall Street Journal has reported.
Be sure to read the SEC's full announcement and sample letter for yourself, but this is what stuck out to me about what companies certainly should consider before their next SEC filing:
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Tweet me: .@Workiva shares key takeaways to consider on news of #SEC posting a sample letter highlighting potential disclosures public companies should consider related to #climatechange signaling it intends to build on its 2010 climate disclosure guidance
KEYWORDS: Workiva, NYSE: WK, Steve Soter, ESG Reporting