TheCorporateCounsel.net

Intelligize recently took a deeper dive into SEC climate change comment letters in its Climate Change Disclosure Report: From Omission to Commission. Intelligize examined comment letters issued both before and after the Staff published the sample comment letter on climate change-related disclosure in September 2021, and found that enforcement before 2021 focused on information missing from filings, while post-2021 enforcement has focused on the quality and accuracy of companies’ climate change disclosure, including potentially problematic assertions about their environmental sustainability records. The report notes:

Perhaps it should not surprise us that the SEC’s 2010 statement on climate change has proved so durable. The interpretive guidance did not speak in great specifics. In that way, it is consistent with the philosophy behind principles-based rules, which have the advantage of standing firm even while facts and circumstances change.

Indeed, the SEC’s comment letters on climate-related disclosure between 2010 and today might reflect more about how public companies have changed than how the SEC has. In the different world of 2010, companies and brands were more likely to shy away from the topic of climate change. By 2021, widespread acceptance of the environmental reality had inclined companies to more eagerly attest to their “green” credentials. The SEC’s enforcement pattern has changed, in turn, from one focused on omissions of disclosure to commissions of inaccurate reporting.

– Dave Lynn