![]() More recently, Ceres identified only six SEC comment letters that mentioned climate change between 20. Ceres also found in the same study that between 20, only 25 of the more than 45,000 comment letters sent by SEC staff to companies related to climate change disclosures. Further, in an analysis of 10-K annual reports filed by S&P 500 companies between 20, Ceres, a sustainability non-profit organization, concluded that while the percentage of companies making any climate-related disclosures increased from 45% to 59% over this period, most of the disclosures “are very brief, provide little discussion of material issues, and do not quantify impacts or risks.” This conclusion has been cited by Chair Gensler. In a 2012 report prepared at the direction of the Senate Committee on Appropriations, SEC staff indicated that they did not find any notable year-to-year changes in the disclosures reviewed from the year before the 2010 Guidance to the year after. ![]() The 2010 Guidance’s immediate impact on public company climate change disclosure practices was limited. Where that materiality threshold has been met, the SEC stated that companies would be required to make climate change disclosures under Regulation S-K in the description of the business, discussion of legal proceedings, risk factors, and/or management’s discussion and analysis. Guidance provides that the direct and indirect consequences of climate-related regulations, legislation, international accords and business trends, as well as the physical effects of climate change, could have a material effect on a registrant’s business and operations. The 2010 Guidance came after several years of mounting pressure from state attorneys general, environmental groups, institutional investors and others to clarify climate change disclosure requirements under existing SEC rules. In 2010, the SEC published interpretive guidance (the “2010 Guidance”) for public companies regarding existing disclosure requirements as they apply to climate change matters. SEC’s Existing Climate Disclosure Guidance and Recent Comment Letters It concludes by identifying actions public companies can take now to prepare for potential increased enforcement and disclosure obligations. This Alert provides background on the SEC’s actions and statements relating to climate change disclosures, including recent comment letters, and discusses takeaways from the responses to its request for public input on climate change disclosures. 2 In the meantime, recent comment letters sent to public companies from the SEC’s Division of Corporation Finance suggest the SEC is already taking a more proactive approach to the review of climate disclosures than it has in prior years. ![]() The SEC’s Spring 2021 regulatory agenda, published in June, includes proposed rule amendments slated for October 2021 “to enhance registrant disclosures regarding issuers’ climate-related risks and opportunities.” SEC Chair Gary Gensler has also said that he has requested SEC staff “to develop a mandatory climate risk disclosure rule proposal for the Commission’s consideration by the end of the year,” but suggested that it may be early 2022 before the rule is released to the public. In February and March 2021, the SEC hired its first-ever Senior Policy Advisor for Climate and ESG, directed the Division of Corporation Finance to enhance its focus on climate-related disclosures in public company filings, created a Climate and ESG Task Force in the Division of Enforcement, and solicited public input on climate change disclosures. ![]() Securities and Exchange Commission (the “SEC”) stands out for its response to President Biden’s government-wide mandate to advance climate policy, as articulated in a series of executive orders. Among independent federal agencies, the U.S. ![]()
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