The US Securities and Exchange Commission (SEC) has finalized rules mandating climate-related disclosures for public companies registered in North American markets. This rule requires companies to integrate material physical and transition climate risks directly into annual reports (Form 10-K).
Key Highlights of the SEC Rule
- Material GHG Disclosures: Large Accelerated Filers (LAFs) must report Scope 1 and Scope 2 GHG emissions if deemed financially material.
- Financial Statement Notes: Severe weather events, natural disasters, and carbon offset expenditures must be itemized in audited financial statement footnotes.
- Phased Attestation Mandates: Disclosed emissions require limited assurance initially, escalating to reasonable assurance (full audit) over subsequent filing cycles.
Impact on Global Vendors & Exporters
International suppliers providing components or raw materials to US public companies will face increased data requests to satisfy climate risk governance. For global comparability across financial markets, review the ISSB IFRS Compliance Roadmap and our guide on Demystifying Scope 3 Emissions.