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March 21, 2022 marked the publication of the proposed climate disclosure rule from the US Securities and Exchange Commission (SEC) – a new and pivotal measure in the US that would require public firms to enhance their standardized climate-related disclosures. Following the end of the comment period in June 2022, the SEC is aiming to publish its final rule in the ‘Federal Register’ by mid-October 2022, in what will be a landmark moment for climate change disclosures – but also a catalyst for criticism from firms, banks, investors, politicians and other stakeholders. Bank of America and Wells Fargo, for instance, as well as members of the US government, have written extensively to the SEC calling for it to revise the rule, asserting that in its proposed form, it will require myriads of data that are too complex to collect and calculate and may not be necessary for investors. This report will consider the challenges issuers may face when following the SEC’s proposed rule. It will discuss the various compliance requirements and the implications these pose for the C-Suite, heads of sustainability and boards of directors.
Table of contents
The SEC Climate Disclosure Rule Poses Multiple Challenges For Issuers
Unpacking The Comprehensive Coverage Of Carbon Management Business Issues According To The SEC Climate Rule
Overhauling Carbon Data Management And Financial Reporting Will Help Firms Address The Challenges Posed By The SEC
Anticipated Dilutions And Delays Create Uncertainty For Issuer Project Work
Sustainability Leaders Need To Be Smart About Legal Uncertainties
Firms At The Start Of Their Climate Disclosure Journeys Should Follow Three Key Strategies
Table of figures
Figure 1. Timeline of the Proposed SEC Climate Rule
Organisations mentioned
Bank of America,
CDP,
Coca-Cola,
Deloitte,
Delta Airlines,
Enablon,
EU,
ExxonMobil,
Federal Register,
Fortune,
Greenomy,
Hershey’s,
KPMG,
Mars,
McKinsey & Company,
Microsoft,
Nestlé,
PwC,
Salesforce,
Supreme Court of the United States,
US Environmental Protection Agency (EPA),
US Securities and Exchange Commission (SEC),
Wells Fargo,
Wolters Kluwer,
Workiva,
WSP Global
About the authors
Analyst
Maya is a Net Zero, Climate Risk Analyst. She is currently specialising in carbon management, ESG regulations, and identifying climate risk solutions. Prior to joining Verdantix, Maya interned at Cardano Advisory where she gained experience in covenant, sustainability, and pensions corporate finance matters. Maya holds a master's degree in Conflict Resolution in Divided Societies with Distinction from King's College London, and an undergraduate degree in International Relations from SOAS, University of London.
Research Director, ESG & Sustainability
Kimberly Knickle is Research Director of the ESG & Sustainability practice at Verdantix. Her research areas encompass ESG regulations and reporting, ESG risk, supply chain sustainability, circular economy, social impact, and sustainable finance. Kim has worked for more than 20 years in the IT industry, providing research and analysis to help companies invest wisely in new technologies. Before joining the analyst industry, she held various roles in IT services, engineering and product safety testing, beginning her career at Underwriters Laboratories, Inc. Kim holds an MBA from Boston University and a BS in Electrical Engineering from Cornell.
CEO
David is the CEO of Verdantix and co-founded the firm in 2008. Based on his 20 years of experience in technology strategy and research roles he provides guidance on digital strategies to C-level executives at technology providers, partners at private equity firms and function heads at large corporations. His current focus is on helping clients understand their market opportunity tied to ESG investment trends and their impact on corporate sustainability strategies. During his 12 years running Verdantix – including 4 leading the New York office – he has helped dozens of clients grow their businesses through fund raising, acquisitions and international growth. David was previously SVP Research at Forrester and Head of Analysis & Forecasting at BT. He holds a PhD from Cambridge University and also worked as a Research Associate at the Harvard Business School.