[author: Melissa Pfeuffer]

In its recent white paper, “Climate Change Disclosure Report: From Omission to Commission,” Intelligize revisits the Securities and Exchange Commission (“SEC”) climate change-related disclosure guidance. The report notes that the SEC only has provided guidance twice, first in 2010 and again in 2021. The report expresses that the SEC’s 2010 interpretive guidance addressing companies’ climate change disclosure was exactly that: guidance. Yet, the report states that this twelve-year-old guidance has “proved durable.”

It was not until 2021 that the topic of climate change disclosure was revisited by the SEC (see our related post). The white paper looks at SEC Staff comment letters related to climate change disclosures that were issued after 2010, and also covers comment letters issued following the SEC Staff’s 2021 sample letter, as well.

The report finds three instances where SEC Staff comments were dedicated to climate change risk factor disclosures; two from 2010 (for different companies) and one from 2021. Both 2010 SEC comments were in reference to “lack of disclosure…related to climate change,” where the SEC Staff requested more specific discussion regarding the impacts that the company would face from climate change. Years later, in its 2021 comment to a third company, the SEC Staff requested they “address the negative impact… [and] include potential regulatory and legislative risk…” with respect to climate change.

The report looks at comments issued on the MD&A section and goes through the Staff guidance regarding the Regulation S-K framework for MD&A disclosure. There are few comment letters referencing climate-related subjects in MD&A; the report cites only a handful, and states, “If the SEC had issued more comment letters on climate disclosure over the last decade, we might have a more definite sense of whether it expects issuers to address those topics in the MD&A section or elsewhere.”

Finally, the report reviews comment letters relating to disclosure in the general section, identifying comment letters to three relatively high-profile issuers regarding claims of carbon neutrality where the Staff questioned the issuers to “justify or remove positive statements made about their own environmental record.”

With more attention focused on climate change every day, companies have been more inclined to include disclosures related to this—however, comment letters offer little guidance.

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