US SEC adopts scaled-back climate-related disclosure requirements

On 6 March 2024, the U.S. Securities and Exchange Commission (SEC) adopted its long-awaited climate-related disclosure rules, which mandate (scaled-back, but still significant) climate-related disclosures from SEC registrants, including foreign private issuers. 

The SEC has significantly scaled back its 2022 proposal, including making the following changes in the final rules (this is a non-exhaustive list): 

• eliminating the proposed Scope 3 emissions disclosure requirement;
• requiring only accelerated filers (AFs) and large accelerated filers  (LAFs) - rather than all registrants - to make Scope 1 and Scope 2 emissions disclosures, and then only if material;
• exempting smaller reporting companies (SRCs) and emerging growth companies (EGCs) from the Scope 1 and Scope 2 disclosure requirements;
• including a materiality qualifier on certain disclosures, including  disclosures regarding impacts of climate-related risks, use of scenario analysis and maintained internal carbon price;
• eliminating the proposed requirement to describe board members’ climate expertise;
• providing AFs and LAFs with more time to obtain assurance reports and only requiring LAFs to obtain reasonable assurance reports; and
• extending the phase-in periods for compliance.

The final rules will become effective 60 days after their publication in the Federal Register publication (usually a few weeks after the rules have been adopted). The SEC is providing phased-in compliance dates dependent upon the status of the registrant (starting with the annual report covering the 2025 fiscal year for LAFs) and the content of the disclosure.

Although the final version of the rules is less onerous than the original proposal, the rules were approved over a spirited dissent by two of the five SEC commissioners, and we expect the rules to be challenged in court. 

For more information on the new rules, see our clients briefings:

• high-level summary  
• detailed analysis