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Some Good News!

By Ted Wells

The US Securities and Exchange Commission (SEC) just Mandated Climate Disclosure

Climate change remains one of the most pressing issues of our time, and the role of businesses in mitigating its impacts is undeniably crucial. As consumers, investors, and regulators increasingly demand transparency, companies that step up to disclose their climate impacts not only contribute to global sustainability efforts but also set a new standard in corporate responsibility.

New Rules for Companies to Disclose Climate Risks

The final SEC rules require designated companies to disclose material climate-related risks; their activities to mitigate or adapt to such risks; information about the company’s board of directors' oversight of climate-related risks; and management’s role in managing material climate-related risks.  Also, to help investors’ and customers’ understanding of climate-related risks, the final rules require disclosure of Scope 1 and/or Scope 2 greenhouse gas (GHG) emissions by certain larger companies; and disclosure of the financial statement effects of severe weather events and other natural conditions including costs and losses.

The final rules will require information about a company’s climate-related risks that have materially impacted or are reasonably likely to have a material impact on its business strategy, results of operations, or financial condition.  In addition, under the final rules, certain disclosures related to severe weather events and other natural conditions will be required in a registrant’s audited financial statements.

The journey towards a more sustainable and environmentally responsible business landscape is paved with challenges and opportunities alike. At its core, climate impact disclosure is about transparency and accountability. By openly sharing information on how their operations contribute to climate change, companies invite stakeholders into a dialogue aimed at finding solutions and setting targets for carbon footprint reduction.

Take Action!  Although believes we need even more disclosure from companies, the new SEC action is a step in the right direction!


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