Federal and State Policies Impacting ESG Reporting Could Be Issued in 2023

An SEC rule on climate-related financial disclosure is expected this spring.

In 2022, the U.S. Securities and Exchange Commission (SEC) published a proposed rule requiring publicly traded companies to step up their reporting on climate-related risks. The proposed rule, The Enhancement and Standardization of Climate-Related Disclosures for Investors, drew over 15,000 comments, including a letter from USGBC, and the SEC has indicated that it plans to finalize the rule in April.

News reports suggest the SEC is still considering the scope of the rule, particularly whether to include scope 3 (supply chain) emissions in reporting requirements. The agency is reportedly also considering easing the threshold for financial reporting on climate risks; as proposed, the rule would have companies analyze climate-related costs and risks for each line item of their financial statements and report any climate costs that are 1% or higher on a line item basis.

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