Government Watchdog Says SEC’s Climate Change Disclosure Rules are Clear
After a comprehensive review, the Securities and Exchange Commission’s (“SEC”) documents related to its climate change disclosure requirements have received the Government Accountability Office’s (“GAO”) approval. In a March 22 report, the government watchdog group said that the SEC’s disclosure requirements concerning climate-related risks under Release No. 33-9106, Commission Guidance Regarding Disclosure Related to Climate Change, are clear and do not need additional guidance.
Release No. 33-9106 requires companies to disclose to investors the climate change risks they face, such as lawsuits or regulatory supervision. Effects caused by climate change could potentially impact a public company’s operations and financial stability. The GAO, however, discovered that climate-related disclosures differ in format since companies state similar disclosures in various sections of their SEC filings.
The GAO’s review included Release No. 33-9106, the SEC’s reports to Congress, company filings, and comment letters distributed to companies on climate-related disclosures. The GAO also focused its review on the oil and gas, mining, insurance, electric and gas utilities, and food and beverage industries. These five industries were selected since they are more likely to be impacted by climate change due to the nature of their operations.