In March 2022, the U.S. Securities and Exchange Commission (SEC) proposed The Enhancement and Standardization of Climate-Related Disclosures for Investors, a rule requiring the disclosure of climate-related risks by SEC registrants in their regular agency filings. By proposing the rule, the United States joins an emerging set of regulators around the world seeking to support investors as they allocate capital and manage financial risks through consistent and comparable climate-related risk disclosure. The Center for Climate and Energy Solutions (C2ES) participated in public comment periods throughout the development of the SEC’s rule, including submitting a response to the initial agency Request for Information in 2021 and to the proposed rule in 2022. C2ES also offered an alternative option to one of the proposed aspects of financial reporting in separate comments in early 2023. After these comment periods, the SEC released the final version of the rule on March 6th, 2024. Immediately following the rule’s release, C2ES prepared a fact sheet highlighting the rule’s key sections.

C2ES welcomes the final SEC rule, which will play an important role in helping companies and investors navigate the clean energy transition by identifying climate risks, how companies are managing these risks, and how business models are evolving to capture climate opportunities and otherwise thrive in a low-carbon, more climate-resilient economy. In particular, the rule will help investors understand how companies view their climate risks over the short and long term, as well as if and how companies are taking action to respond to climate risks at a financial and strategic level. C2ES is also pleased to see the SEC include many recommendations from comments we provided in the final rule, including additional safe harbors, extended compliance timelines, more streamlined and clarified financial metrics, and more flexibility in key areas.