SEC Adopts Climate Change Disclosure Rules Applicable to Public Companies and Offerings

The Securities and Exchange Commission (the “SEC”) has adopted new rules that require public companies to disclose substantial information about the material impacts of climate-related risks on their business, financial condition, and governance (the “Final Rules”). The SEC says that “climate-related risks, their impacts, and a public company’s response to those risks can significantly affect the company’s financial performance and position.”

The Final Rules require disclosure of range of climate-related matters, including:

• Any material climate-related risks and their impacts on the registrant’s business strategy, results of operations, and financial condition, as well as on the registrant’s outlook and business model.
• Any activities, plans, or processes to mitigate, adapt to, or manage material climate-related risks, including the use of transition plans, scenario analyses, or internal carbon prices.
• Any board oversight and management role in assessing and managing material climate-related risks.
• Any targets or goals that have materially affected or are reasonably likely to materially affect the registrant’s business, results of operations, or financial condition.
• Scope 1 and/or Scope 2 greenhouse gas emissions (“GHG”) by certain larger registrants when those emissions are material, and the filing of an attestation report covering the required disclosure of such emissions, in each case, on a phased-in basis.
• The financial statement effects of severe weather events and other natural conditions, including costs and losses.

Our Legal Update discusses the Final Rules.

We also include a table with the text of Subpart 1500 of Regulation S-K and a table with the text of the revisions to Regulation S-X.