What SEC commentary and the influence of existing frameworks could mean for mandatory climate disclosures in the US.

US Securities and Exchange Commission (SEC) Chair Gary Gensler has publicly stated that the SEC will propose a rule to require climate-related disclosures in public filings and that the proposal will likely be made before the end of this year. This anticipated rulemaking represents a critical step forward in the SEC’s growing focus on sustainability and climate matters over the past several years. In light of the near-exponential growth in voluntary disclosure frameworks and significant global momentum for mandatory climate and sustainability disclosures, Chair Gensler indicated that he expects such a rule to bring clarity in relation to a number of questions that have been raised by public companies, including the scope of reportable emissions, the appropriate reporting standards, and other relevant benchmarking criteria.2 In order to prepare for this impending rulemaking, it is advisable to first understand the history of the SEC’s review of climate disclosure and to develop a working knowledge of the existing climate disclosure frameworks that have taken root in voluntary disclosures and in jurisdictions outside the US.