United States:
Analysis Of The Decade-Long Climate Change Disclosure Endeavor
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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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Mayer Brown article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
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