On March 6, the SEC voted 3-2 to require large companies to disclose their greenhouse gas emissions and the ways in which climate change poses risks to their business, representing one of the most far-reaching measures by the federal government to push companies toward climate accountability.
This highly anticipated rule drew more than 24,000 comments from companies, auditors, legislators, and trade groups over a two-year process – and is less robust than the SEC’s original climate disclosure plan due to strong pushback from companies and hard-to-abate industries. It mandates large and midsize companies to report emissions for their fiscal years that start in 2026 and 2028, respectively.
Notable takeaways of the highly anticipated rule include:
- Material Disclosure: Companies will have to report the greenhouse gas emissions generated at their own facilities, but only those that are significant to their bottom lines.
- Scope 3 Omitted: The new rule will not require companies to disclose their Scope 3 emissions, contrary to what had been included in the SEC’s original proposal. This is noteworthy as Scope 3 tends to make up the majority of most companies’ emissions.
- Climate Risks and Expenditures: Companies will need to reveal any climate-related risks and losses due to extreme weather events fueled by climate change, such as wildfires and rising seas. They will also need to reveal any expenditures related to their climate goals, such as purchases of carbon offsets or renewable energy credits.
- Small Companies Exempt: The rule applies to large and mid-size businesses with smaller companies exempt, another change from the original proposal, which would have required all publicly traded corporations to disclose their direct emissions.
- Legal Liability: Climate disclosures will be legally binding, to prevent companies from misstating their emissions.
ClimeCo has experts to help you navigate these new disclosure requirements – contact us for more information.
About ClimeCo
ClimeCo is a global sustainability company headquartered in Pennsylvania, with projects and partners all over the world. Our mission is to advance the low-carbon future and restore nature with market-based solutions. We offer comprehensive services spanning environmental asset innovation, ESG and climate strategy consulting, regulatory and policy advisory, environmental credits, API solutions, and climate action certification programs.
Our growing team of respected scientists and industry experts collaborate with companies of all sizes, governmental groups, NGOs, and capital markets players on ESG, decarbonization, and policy issues—allowing us to develop high-quality, purpose-built end-to-end sustainability solutions with measurable impact. We are steadfastly committed to educating and empowering our clients, no matter where they are in their sustainability journey, to be confident in a rapidly evolving marketplace.
Take your climate initiatives to new heights by collaborating with ClimeCo. Contact us at
+1 484.415.0501, info@climeco.com, or through our website climeco.com.
