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SEC mandates climate reporting and assurance

Defining Issues | April 2024

With its final climate rule, the SEC has responded to concerns while crafting meaningful disclosures for investors.

Latest: On April 4, 2024 the SEC stayed the climate rule pending judicial review – read our web article.

The specific events that culminated in adoption of the climate rule on March 6, 2024, began in March 2021 when the SEC requested public input on climate-related disclosures to help evaluate its then current rules and guidance. This was followed in March 2022 by issuance of the SEC’s proposed climate reporting rules. Over the last two years, the SEC considered more than 4,500 unique comment letters (over 20,000 letters in total) as it drafted its final rules.


SEC Release Nos. 33-11275 and 34-99678

Final rule: The Enhancement and Standardization of Climate-Related Disclosures for Investors AGENCY: Securities and Exchange Commission

  • Registrants with Exchange Act reporting obligations pursuant to Exchange Act Section 13(a) or Section 15(d), and companies filing a Securities Act or Exchange Act registration statement
  • Includes Foreign Private Issuers; excluding Canadian issuers reporting under the Multijurisdictional Disclosure System and asset-backed issuers

With the final SEC Climate Rule comes clarity in what transparency is required. Companies now have a defined destination and can put all their effort into creating a rigorous, repeatable, timely climate reporting process.

Maura Hodge

KPMG US Audit ESG Leader

There are two distinct components to the disclosures: 

  • Reg S-X financial statement disclosures, which will be part of the audited financial statements and therefore in the scope of the registrant’s internal control over financial reporting. 
  • Reg S-K climate-related disclosures in the registrant’s annual report or registration statement. These disclosures can be included in a separately captioned ‘Climate-Related Disclosure’ section of the annual report or registration statement, or incorporated by reference from another section. The disclosures can also be incorporated by reference from another filing, subject to certain conditions. 

The two sets of disclosures are connected because the Reg S-K disclosures require quantitative and qualitative disclosure of any material expenditures incurred and material impacts on financial estimates and assumptions that directly result from certain items.

With effective dates being phased in depending on the type of registrant and type of disclosure, read our Defining Issues to understand what’s required where.

Download the document :

SEC on Climate

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