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Getting ready for the SEC Climate Disclosure Rule

Enhancing and standardizing climate-related disclosures

On March 21, 2022 the U.S. Securities and Exchange Commission proposed rule changes requiring companies to disclose certain climate-related information, ranging from greenhouse gas emissions to expected climate risks to transition plans. 

Drawing from the TCFD framework, the proposals would provide investors with consistent, comparable, and decision-useful information for making investment decisions, and consistent and clear reporting obligations for issuers.

Let us help you prepare for the SEC Climate Disclosure Rule

Highlights of the SEC’s climate disclosure proposal 

According to the SEC, the newly proposed rule would require SEC-registered domestic or foreign companies to include climate-related information in registration statements and periodic reports such as 10-K annual reports.

Key proposed disclosures include: 

  • Climate-related risks and their actual or likely material impacts on business, strategy, and outlook. 
  • Details about governance practices on climate-related risks and relevant risk management processes. 
  • Scope 1 and Scope 2 greenhouse gas emissions, which would require attestation reports for accelerated filers.
  • Scope 3 emissions if either of two conditions are present: 1) If Scope 3 emissions are material to the company or 2) if the company has set an emissions target or goal that includes Scope 3 emissions. 
  • Certain climate-related financial statement metrics and related disclosures in a note to audited financial statements.
  • Information about climate-related targets and goals, and transition plan, if any.

Source: U.S. Securities and Exchange Commission Fact Sheet: Enhancement and Standardization of Climate-Related Disclosures

Five steps to prepare for SEC Climate Disclosure Requirements

Following the U.S. Securities and Exchange Commission (SEC) proposed rules for climate disclosure, the pressure is building up for public companies to accelerate their plans to capture, measure and disclose emissions data.

Are you looking to run a sustainability report for the first time? Measure GHG emissions, understand material environmental, social and governance topics, and report sustainability performance in line with well-recognized global reporting frameworks and peer disclosure practices with our Sustainability Starter Pack.

  • Step 1
  • Step 2
  • Step 3
  • Step 4
  • Step 5

Step 1

Under the proposed rule, companies would be required to disclose their direct (Scope 1) and indirect (Scope 2) GHG emissions, and potentially disclose their value chain emissions (Scope 3).

  • Calculate carbon footprints that quantify GHG emissions across the entire global value chain, including company operations, supply chains and downstream products in use.
  • Measure financed emissions in multi-asset investment portfolios or loan books.


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Step 2

Under the proposed rule, companies would be required to disclose the material risks posed by climate change to their business and their consolidated financial statements, including physical risks (such as sea level rise and extreme weather events) and transition risks (such as changes in regulations and market trends). Companies would also be required to disclose the scenario analysis results (if they use one) that assess the potential impact of different climate scenarios on their business.

      • Understand asset-level physical risks and quantify their financial impact
      • Evaluate the business impact of climate transition risks
      • Undertake scenario analysis to assess the potential effects of physical and transition risks
      • Translate climate scenarios into drivers of financial performance

  • Calculate modelled average annual loss attributed to climate-related physical risks with Physical Climate Risk analysis.
  • Quantify transition risks like policy, technology, market and reputation risks arising from a low carbon transition, and apply climate scenarios to enable you to assess the impact of a lower carbon economy with our TCFD Solutions.
  • Apply climate scenarios to enable you to assess the impact of a lower carbon economy with our Scenario Analytics, that are aligned with frameworks like the TCFD.


Case Studies

Step 3

Under the proposed rule, companies may also identify climate-related opportunities that could arise from the transition to a low carbon economy, including how well existing product portfolio and future development plans are positioned for the low carbon transition.

      • Translate climate scenarios into drivers of financial performance


Case Studies

Step 4

Although targets are not currently proposed, refer to the Science Based Targets initiative to set robust and science-based targets to strengthen your commitment to managing climate-related issues and align your strategy with the goal of the Paris Agreement.

  • Set science-based targets for emission reduction
  • Understanding how much and how quickly you need to reduce carbon emissions to align with the Paris Agreement


Case Studies

Step 5

Under the proposed rule, companies would be required to disclose the extent of their board's role in overseeing climate-related risks and opportunities. Reporting based on recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) is acceptable.

  • Disclose activities in line with the recommendations of the TCFD
  • Engage with stakeholders


Case Studies

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Drawing from the TCFD framework

The SEC’s proposed rule is modeled on the framework created by the Task Force on Climate-related Financial Disclosures, or TCFD, and would require companies to outline their climate-related governance practices, expected risks and energy transition plans, including for meeting decarbonization targets, if the companies have set them.

The rule invites companies to outline any opportunities they see coming from climate change. And it would provide companies a safe harbor from lawsuits for any forward-looking statements, except those made in connection with an initial public offering.

How we can help

  • Sustainability Starter Pack

    Get started on your ESG reporting journey with a starter pack that provides a holistic view.

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  • TCFD Reporting

    Our in-depth climate analytics and specialist support services inform every step of your TCFD reporting journey.

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  • Streamlined Sustainability Reporting

    Our modular, end-to-end solution streamlines compliance with sustainability regulatory reporting requirements, from data sourcing through to the submission of disclosures.

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  • Physical Climate Risk

    Discover comprehensive data coverage and hyper-local insight on weather related risks and trends across asset locations, investment portfolios and supply chains.

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  • Science Based Target Setting

    Set robust science-based targets to strengthen your commitment to managing climate-related issues and align your strategy with the goal of the Paris Agreement.

    Learn More
  • Data Delivery and Workflow Tools

    Access essential sustainability data intelligence via a single, streamlined desktop platform and tech-forward productivity tools.

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These requirements could change depending on the content of the SEC’s final rule.


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