Organizations Involved: Environmental Defense Fund
Source: Environmental Defense Fund
Abstract
On March 6, 2024, the Securities and Exchange Commission (SEC) issued a final rule for “The Enhancement and Standardization of Climate-Related Disclosures for Investors.” The rule requires covered companies to disclose certain types of climate-related information, bringing climate risk disclosure on par with other financial reporting requirements for publicly traded companies.
The SEC requirements will be phased in over several years and will replace inconsistent, voluntary reporting of climate risk exposure with clear and consistent standards. The rule marks an essential step forward in enhancing investors’ capacity to manage portfolio-wide climate risks, protecting the overall health of the financial system.
This investor guide provides investors with an overview of the rule and its key components, summarizes the implications of the rule, puts it into context with other international frameworks, and maps out next steps towards implementation.
This rule represents a crucial step forward in climate-related financial risk reporting and will strengthen the overall health and stability of the financial system. We recommend that investors – the direct beneficiaries of this rule – publicly voice their perspectives on climate risk disclosure to help inform and support the rule’s implementation.
