What Will SEC’s Final Climate-Related Disclosure Rules Mean for You?

March 14, 2024
3 Minute Read

On March 6, 2024, the SEC commissioners voted and adopted rules to enhance and standardize climate-related disclosures by public companies and in public offerings. The final rules include a number of significant disclosure requirements, which are detailed in an 886-page document. Janis Parthun, RGP VP, Consulting Services and leader of ESG Reporting services, covers the highlights here, including key changes in the final rules versus what was originally proposed as well as key compliance dates.

As the SEC said in its press release announcing the decision, the final rules “reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules.”

In this brief (20-minute) presentation, I provide a high-level overview of these changes. 

Final Rules Align with TCFD Framework

First, the final rule is still consistently aligned with the TCFD (task force on climate-related financial disclosures) and its framework, with the related disclosure requirements following a similar structure in the order of governance, strategy, risk management, and metrics and targets.

  • Governance: Oversight by the board of directors of climate-related risks and any role by management in assessing and managing the material climate-related risks.
  • Strategy: Climate-related risks that have had or are reasonably likely to have material impact on the company’s business strategy, results of operations, or financial condition. Includes quantitative and qualitative description of material expenditures and transition plans, scenario analysis, or internal carbon prices if any.
  • Risk Management: Processes for identifying, assessing, and managing material climate-related risks and, if managing those risks, whether and how such processes are integrated into the company’s overall risk management system.
  • Metrics and Targets: Climate-related targets or goals, that have materially affected or are reasonably likely to materially affect the company’s business, results of operations, or financial condition. Includes material expenditures, material impacts on financial estimates and assumptions, and carbon offsets as a component to achieve targets or goals.

A Closer Look at Key Changes from the Proposed Rule

There are a number of key changes from what was proposed and I’ve highlighted them here.

  • Removed: Disclose impact of severe weather events, natural conditions & transition activities on each line item of the company’s consolidated F/S (Reg S-X).
  • Modified: Adopt a less prescriptive approach, extend certain phase-in periods, disclose F/S effects on capitalized costs and expenditures.
  • Removed: Describe board members’ climate expertise.
  • Modified: Qualify the requirements to provide certain climate-related disclosures based on materiality, and related material expenditures. (Please note: Materiality is a significant topic brought up multiple times within the final rules, which your company will need to further evaluate and define.)
Targets and goals
  • Modified: Carbon offsets specifically identified to disclose if applicable: item 1504(d).
Attestation for GHG emissions
  • Removed: SRCs and EGCs subject to emissions disclosure requirement, provide Scope 3 emissions disclosure.
  • Modified: Extend reasonable assurance phase-in period for large accelerated filers (LAFs), limited assurance only for accelerated filers (AFs), and an option to provide disclosure on delayed basis. ((Again: Materiality is also highlighted within the final rules in relation to material Scope 1 emissions and/or Scope 2 emissions, which your company will need to further evaluate and define.)
Other information
  • Removed: Disclose any material change to the climate-related disclosures provided in a registration statement or annual report in a Form 10-Q.
  • Modified: Extend a safe harbor to a registrant’s transition plan, scenario analysis, internal carbon pricing, and targets and goals. This means a company has safe harbor from private liability for certain disclosures noted here, other than historic facts.

Key Timelines and Applicability

When Will the New Rules Take Effect? With the extended phase-in period, initial disclosure requirements will apply for LAFs in fiscal years that begin 2025. This table outlines key compliance dates:


There are additional changes within the final rules that I have not covered here and a significant number of discussion points within the hundreds of pages of documentation. There are additional related regulations in certain U.S. states (e.g., California) and in countries outside the U.S. So an in-depth analysis is recommended to better understand how these requirements will impact your business.  If you haven’t yet started the process of mapping out your strategy and road map to address these new SEC climate disclosure-related rules, now is the time to get started. RGP’s consulting team can help you stay ahead of these evolving requirements, whether from the regulatory or operational reporting perspectives. So please reach out if you have any questions.

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Janis Parthun

VP, Advisory & Project Services
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