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With the SEC’s adoption of its climate disclosure rules, many companies are now confronting the need to comply with a not entirely consistent set of climate disclosure obligations imposed by the EU, California, and the SEC. Since that’s the case, the question for many companies is – “Where do we start?”  This Proskauer memo may not be a bad place.

The memo contains a chart the key requirements of the EU’s CSRD and California’s reporting regimes, and also lays out the disclosure requirements set forth in the SEC’s original proposal. Now, since Meredith did everybody a solid by cataloging what aspects of the SEC’s proposal didn’t make the cut in final regs, I think it’s a fairly easy matter to go through and cull those aspects from the chart when you are identifying what’s required. Once you’ve got the chart of requirements in front of you, the memo offers the following thoughts on next steps:

As an initial step, a scoping exercise is recommended to analyse carefully which parts of your group or entities may be subject to the California Rules, CSRD and the proposed SEC Rules, respectively. If there is actual or potential capture, the next step would be to understand when the reporting requirements apply. Following the scoping and timing assessment, an analysis of the content required to be reported on can begin with an evaluation of whether any existing sustainability reporting and underlying policies and processes can be utilized, particularly for the California Rules where there is the potential to rely on other national and international sustainability reporting obligations and requirements.

In particular, companies are recommended to develop or revisit existing compliance frameworks that support the calculation of their GHG emissions data in accordance with the GHG Protocol 5 and TCFD, as that component is unlikely to change even if the California Rules are to be amended, and also will be useful to leverage for any capture under CSRD and the SEC Rules.

– John Jenkins