- ORIGINAL NEWS
What the SEC climate disclosure rule may mean for investors
- SUMMARY
The Securities and Exchange Commission (SEC) will soon require companies to report on climate-related risks and emissions.
This will provide investors with more information about how climate change affects businesses and how they contribute to global warming.
The disclosures will be made in annual filings and registration statements and will include physical and financial risks, as well as greenhouse gas emissions.
Many other countries already require climate reporting, and California recently passed a law requiring large companies operating in the state to disclose their emissions.
The SEC’s rule is expected to face legal and congressional challenges, particularly around the disclosure of Scope 3 emissions, which are indirect and occur throughout a company’s value chain.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“The rule — initially proposed in March 2022 — would expand investors’ insight into the threat that climate change poses to publicly listed companies and how businesses contribute to a warming planet.”
“Transparency around climate risk may be essential for investors to gauge if a company’s stock is worth holding or if its stock price is reasonable”
Negative
“Congressional and legal challenges to the rule “are likely””