March 22, 2022

The SEC’s Climate Disclosure Proposal Is Here

Yesterday, the SEC issued its long-awaited climate disclosure proposal. The Commissioners voted 3-1 in favor of issuing the proposed amendments. Here’s the 3-page Fact Sheet, and here are supporting statements from SEC Chair Gary Gensler, Commissioner Lee and Commissioner Crenshaw, and the dissenting statement from Commissioner Peirce. This write-up from our very own Dave Lynn explains key things to know:

The proposed amendments to the Commission’s rules would require that public companies include extensive quantitative and qualitative information about climate change in their annual reports and registration statements. The earliest that these disclosures would be required if adopted is in 2024 for the largest public companies. The rule proposals are wide ranging and would require that companies add new sections to their annual reports and registration statements that would provide details about climate change matters that are today often disclosed in separate communications outside of the SEC reporting system.

Most significantly, the SEC would require specific disclosure of a public company’s direct GHG emissions (Scope 1) and indirect GHG emissions (Scope 2), as well as indirect emissions form upstream and downstream activities (Scope 3), but in the case of Scope 3 emissions only if material or if the company has set a goal that includes Scope 3 emissions. Disclosures about Scope 3 emissions would be subject to a safe harbor for liability under the federal securities laws and would not be required from smaller reporting companies. For disclosures concerning Scope 1 and Scope 2 emission, companies would be required to file an attestation report covering the disclosures and to provide certain related information about the service provider that prepared the attestation report, which need not be an independent auditor but must meet certain requirements. If these requirements were adopted, public companies would have to rapidly develop processes and procedures that will support the public disclosure of this information in SEC filings.

Among other provisions, the proposed rules would require specific information about climate-related goals or targets that have been set by public companies, including the scope of such goals or targets, data demonstrating progress in meeting such targets, the plans for meeting the goals or targets and information about the use of carbon offsets or renewable energy certificates. Such disclosures, to the extent they are forward-looking, would be protected from certain liability provisions by the safe harbor for forward-looking statements in the Private Securities Litigation Reform Act.

While the Commission did not select one set of standards regarding climate change as the basis for these proposed disclosure requirements, it did model the proposed climate-related disclosure framework in part on the TCFD’s recommendations and also draws upon the GHG Protocol. In this way, certain of the proposed disclosure requirements will be familiar to those public companies that are already providing information under these pre-existing standards.

The breadth and complexity of the Commission’s proposal is certain to draw a significant amount of comment from interested parties, and there will certainly be threats of potential litigation if the rules are adopted in a manner similar to the proposals. As a result, it could prove challenging for the SEC to bring these proposals to final adoption and to implement them in the time frames that have been proposed.

Check out Lawrence’s blog today on for more details about the proposal. He’ll be following up with more analysis in blogs over the coming week and beyond. We’ll also be posting memos in our “ESG” Practice Area on this site.

For a great discussion of practical points that you’ll need to understand, join us at 1pm ET on April 12th for our webcast – “Parsing the SEC’s New Climate Disclosure Proposal.” This program will bring together perspectives from high-level former Corp Fin Staffers – Sidley’s Sonia Barros and MoFo’s Dave Lynn – along with Travelers’ Chief Sustainability Officer & Group General Counsel Yafit Cohn and NuStar Energy’s Executive Director of Sustainability & ESG Mike Dillinger, and Editor Lawrence Heim. This webcast is free for members of and If you aren’t already a member, email

Liz Dunshee