SEC Climate Rule

The US Securities and Exchange Commission (SEC) adopted rules requiring public companies to disclose certain climate-related information in their registration statements and annual reports. The rules cover items such as climate-related risks that are reasonably likely to materially affect the business, governance and risk management of those risks, and certain climate-related financial statement effects.

The final rules were narrower than the original proposal. Their legal status has been contested: the rules drew litigation, and the SEC issued a voluntary stay of the rules while the legal challenges proceed. As a result, whether and in what form US public companies will be required to make these disclosures has remained uncertain.

Because of this uncertainty, many US companies have continued to watch state-level rules (such as California's climate disclosure laws) and international frameworks (such as the ISSB standards) as alternative or additional reference points.

Practitioners following US climate disclosure should treat the rule's requirements as conditional on the outcome of the litigation and any subsequent SEC action, and confirm current status against the official source.