The Securities and Exchange Commission (SEC) is expected to announce whether companies operating in the US will need to disclose their greenhouse gas emissions and the climate risks their businesses face. The decision, set for March 21, would mark a historic change to hold companies responsible for their climate impacts in the US. The regulations may also provide a clearer picture of economic and financial system impacts due to climate change.
Setting clear standards for emissions reporting
Many companies already report their greenhouse gas emissions, but there are no across-the-board standards in the US for how to do so. The SEC announcement would be followed by a public feedback period for any proposed rules.
The move could help investors better assess how climate change will impact the businesses they invest in. And it could make it easier for the US government to assess climate risks to the economy from hurricanes, wildfires, and other disasters.
The challenge for the SEC is clarifying how exactly climate impacts are defined and measured. Some business owners fear that ambiguous rules could leave them open to lawsuits. Companies’ reactions will likely depend on the details of the rules and how far they go—for example, whether they’re required to disclose “Scope 3” emissions from suppliers and customers.