TheCorporateCounsel.net

The SEC pared back the requirements of its final disclosure rules pretty significantly from what it originally proposed, but that still doesn’t mean compliance with them is going to be easy or cheap. In particular, a recent WSJ article points out that pulling together SEC-ready Scope 1 & Scope 2 GHG disclosures isn’t going to be a small task, and that the attestation requirement is going to be pretty challenging & expensive when it kicks in:

The most challenging part of the rule for companies will likely be obtaining a high level of assurance on their Scope 1 and 2 greenhouse-gas emissions, Soter said. Some companies’ sustainability teams aren’t used to the level of regulatory scrutiny that financial-reporting personnel are, but both teams will need to jointly own climate data under the new rules, Soter said. The requirements could prompt companies to invest more in technology and seek consultants’ help to facilitate the review and strengthen their controls, he said.

“To get all the way up to reasonable assurance, I do think that’s going to be fairly daunting for teams that are going to need to do that,” Soter said.

Retaining an accounting or consulting firm to provide those verifications would be an additional cost for companies that aren’t already doing so, said Susan Mac Cormac, a partner at law firm Morrison & Foerster. “There’s a lot of evolution that has to happen there because it needs to be independent and third party.”

By the way, if you’re looking for some guidance on the new climate disclosure rules and how to approach the challenges of compliance, be sure to tune in to our March 27th webcast, “The SEC’s Climate Disclosure Rules: Preparing for the New Regime.”

– John Jenkins