HomeFinance NewsFinanceUnveiled: SEC Drops Bombshell on Investors, Unleashing Climate Transparency Bombshell

Unveiled: SEC Drops Bombshell on Investors, Unleashing Climate Transparency Bombshell


What the SEC vote on climate disclosures means for investors


The Securities and Exchange Commission (SEC) has issued a new rule requiring some U.S. publicly traded companies to disclose their climate-related risks and greenhouse gas emissions.

While the goal is to provide investors with critical information, the rule is less strict than initially proposed.

The final version no longer requires reporting of “Scope 3” emissions, which can account for a vast majority of a company’s carbon footprint.

Despite limitations, the rule aims to enhance transparency and help investors make informed decisions regarding climate-related risks and opportunities.

Challenges to the rule are anticipated, with critics questioning the SEC’s authority over climate matters.

  • Overall sentiment: positive
  • Positive

    “The regulation requires a baseline transparency around climate risks and greenhouse gas emissions from certain U.S. publicly listed companies.”

    “The 886-page rule — which follows a March 2022 proposal — establishes a disclosure framework “floor” for publicly listed companies, transparency that will help inform investors’ decisions, according to Caroline Crenshaw, an SEC commissioner who voted in favor of the rule.”


    “It is watered down from the initial version proposed in March 2022. So-called Scope 3 emissions were stripped out, for example.”

    “Derbes and other observers say that dilution hinders investors’ ability to accurately gauge risk.”

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