The rule represents one of the biggest overhauls of U.S. corporate reporting in years and is a legacy-defining effort for SEC Chair Gary Gensler.
Wall Street’s top regulator green-lighted a groundbreaking rule aimed at uncovering new climate-related information from corporate America, capping a pressure campaign that has fractured Washington for two years.
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It will require public companies in the U.S. to make a raft of new disclosures about climate-related risks that are large enough to threaten their businesses and how they are managing and adapting to them.
Many companies already voluntarily disclose climate-related information. But it’s not uniform and investors can often be left mystified reading companies’ reports, which can be difficult to decipher and compare against one another.
Since the plan’s introduction, Washington’s biggest business groups as well as conservative state attorneys general have aggressively hit back at the SEC with threats of litigation over what they say is a regulatory power grab riddled with technical issues.