Should Boards Still Care About the SEC’s Climate Disclosure Rules?
The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. Detailed information on the use of cookies on this site is provided in our cookie policy. For more information on how The Conference Board collects and uses personal data, please visit our privacy policy. By continuing to use this Site or by clicking "OK", you consent to the use of cookies. 

Should Boards Still Care About the SEC’s Climate Disclosure Rules?

/ Essay

Spoiler Alert: Yes, They Should

Based on recent headlines, board members might be under the impression that regulators are retreating from new sustainability regulations. In February, the EU scaled back the requirements of its draft sustainability compliance rule (the Corporate Sustainability Due Diligence Directive (CSDDD)); in March, the SEC abandoned key requirements in its final climate disclosure rules, such as the disclosure of scope 3 GHG emissions; and in early April, the SEC announced it would pause the final climate disclosure rules pending litigation challenges.

However, while the SEC’s final climate disclosure rules are less stringent than the proposed ones, there still is a lot of work to be done. This essay highlights eight areas that boards should keep in mind:

Spoiler Alert: Yes, They Should

Based on recent headlines, board members might be under the impression that regulators are retreating from new sustainability regulations. In February, the EU scaled back the requirements of its draft sustainability compliance rule (the Corporate Sustainability Due Diligence Directive (CSDDD)); in March, the SEC abandoned key requirements in its final climate disclosure rules, such as the disclosure of scope 3 GHG emissions; and in early April, the SEC announced it would pause the final climate disclosure rules pending litigation challenges.

However, while the SEC’s final climate disclosure rules are less stringent than the proposed ones, there still is a lot of work to be done. This essay highlights eight areas that boards should keep in mind:
  1. While we may not know the outcome of litigation challenging the SEC rules until year-end, companies should continue preparing for compliance. The SEC is facing litigation from both sides of the spectrum, with some arguing the rules are an overreach of the SEC’s statutory authority, too taxing for companies, and not material to a reasonable investor, and others arguing the rules don’t go far enough. The multiple lawsuits have now been consolidated into the US Court of Appeals for the Eighth Circuit, which will complete a judicial review of the consolidated petitions. In the meantime, the SEC has determined to exercise its discretion to pause the rules pending this review. Given how long it has taken other appellate courts to address similar challenges, we can expect a final ruling from the Eighth Circuit by year-end. Along with the US presidential election results, these two events should give companies a clear idea of the future of the rules. In t
This publication is available to you, but you need to sign in to myTCBTM or create an account to access it.To learn more about becoming a Member click here. To check if your company is a Member, click here

Forgot Password?

 

Keep my computer signed in

 

By Clicking 'Create Account',
You Agree To Our Terms Of Use

Create Account  

Members of The Conference Board get exclusive access to Trusted Insights for What’s AheadTM through publications, Conferences and events, webcasts, podcasts, data & analysis, and Member Communities.

Authors

Merel Spierings

Merel Spierings Merel Spierings

Senior Researcher, ESG Center
The Conference Board

Read Bio

Paul Washington

Paul Washington Paul Washington

President and CEO
Society for Corporate Governance

Read Bio

Other Related Resources

✕
hubCircleImage