Policy Briefing — SEC Climate Disclosure Proposal
The U.S. SEC proposed climate-related disclosure rules requiring public companies to report emissions, governance, and risk data in registration statements and annual reports.
Executive briefing: The U.S. Securities and Exchange Commission voted on March 21, 2022 to propose Enhancement and Standardization of Climate-Related Disclosures for Investors, mandating registrants to disclose governance, strategy, risk management, targets, and greenhouse gas emissions metrics.
Immediate compliance priorities
- Comment readiness. Evaluate the proposal’s scope across business units to inform SEC comment letters and industry advocacy.
- Data inventory. Catalogue available emissions, scenario analysis, and climate risk data sources, identifying control gaps.
- Assurance planning. Coordinate with audit firms regarding phased assurance requirements for Scope 1 and Scope 2 emissions.
Control alignment
- Governance structures. Align board oversight and management responsibilities with proposed disclosure controls and procedures.
- Disclosure controls. Integrate climate metrics into SOX 302/404 frameworks, ensuring traceability from source systems to filings.
- Scenario analysis. Enhance risk assessment processes to capture physical and transition risks in alignment with TCFD frameworks referenced by the SEC.
Enablement moves
- Engage sustainability, finance, and legal teams to model compliance timelines under accelerated filer requirements.
- Coordinate with suppliers and portfolio companies to improve emissions data quality, especially for Scope 3 disclosures.
- Invest in reporting platforms capable of producing XBRL-tagged climate disclosures contemplated by the rule.
Sources
- SEC press release on proposed climate disclosure rules
- SEC fact sheet summarising proposed climate disclosure requirements
Zeph Tech partners with public companies to align climate data pipelines, control frameworks, and disclosure processes with the SEC proposal.