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Some readers may recall that the proposed climate rules required the new Reg. S-K disclosures be included in a separately captioned section titled “Climate-Related Disclosure” in a registration statement or annual report. In the final release, the SEC opted to give registrants some flexibility as to the placement of the climate-related disclosures under Reg. S-K but suggested that cross references in a separately captioned section may improve usability. For example, here is the addition to Form 10-K:

Part II
* * * * *
Item 6. Climate-Related Disclosure
Provide the disclosure required by subpart 1500 of Regulation S-K (17 CFR 229.1500 through 229.1507) in a part of the annual report that is separately captioned as Climate-Related Disclosure. A registrant may include disclosure that is responsive to the topics specified in Items 1500 through 1507 of Regulation S-K in other parts of the annual report (e.g., Risk Factors, Business, or Management’s Discussion and Analysis), in which case it should consider whether cross-referencing the other disclosures in the separately captioned section would enhance the presentation of the climate-related disclosures for investors.

In support of this decision to allow flexibility in placement, the SEC noted that the structured data requirements will facilitate investors’ ability to identify and compare climate-related disclosures, regardless of where they are placed — since, of course, the disclosures are required to be tagged in Inline XBRL.

– Meredith Ervine