The proposed rule, aimed at helping issuers disclose risks more efficiently and effectively, prescribes disclosure about climate related-information including greenhouse gas emission and climate risks. These disclosure requirements will impact registration statements and annual reports. See below for an overview of the requirements.

Required Disclosures:

Scope 1 emissions- produced by issuer

Scope 2 emissions- produced for the issuer’s consumption

Scope 3 emissions – greenhouse gas emitted by vendors, supply chain companies, and distributors
- Looser discloser requirements are proposed for Scope 3 emissions stating that vendor emissions must be disclosed if the issuer determines that they are material or if such emissions are included in its voluntary greenhouse gas emissions reduction plan.
- These disclosures would include a safe harbor from liability.
- Small issues would be exempt from vendor emission disclosure requirements.
  Other Requirements
  - Disclosure of how certain climate-related risks could impact the company including:
    - Extreme weather
    - New business models and operations
    - New technology
  - Climate-related goals must include:
    - Scope of activities and emissions
    - Goal’s target and timetables
    - Data supporting the target
    - Information on how the goals will be achieved
    - Details regarding any use of carbon offsets
  - Disclosure of how boards and managers oversee and govern climate-related risks in relation to a larger risk framework.
  - Disclosure of details regarding any climate-related transition plans or internal carbon pricing information.
  - Issuers may also disclose any business opportunities afforded from climate change.
  Timeline
  - Certain large issuers would be required to comply with these provisions by 2024.
  - An additional year would be provided to disclose Scope 3 data
  - Small issues would be given an additional three years to comply with the applicable disclosure requirements.
  The proposal’s comment period will remain open for 30 days after it is published in the Federal Register, or 60 days after it’s posted on the SEC’s website, whichever is longer.
  
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  Sources:
  
  Anthesisgroup.com. 2022. [online] Available at: <https://www.anthesisgroup.com/scope-1-2-3-emissions/> [Accessed 22 March 2022].
  
  Isenberg, D., 2022. SEC Lays Out ESG Disclosures for Issuers. [online] Ignites. Available at: <https://www.ignites.com/c/3544714/453624/lays_disclosures_issuers?referrer_module=emailBreakingNews&module_order=0&cache=0&code=YW5Wc2FXRkFjR2x1WldGa2RtbHpiM0p6YjJ4MWRHbHZibk11WTI5dExDQXhOVFl5TlRFeU5Dd2dORFk0TVRFMU5qUXk> [Accessed 21 March 2022].
  
  Sec.gov. 2022. SEC.gov | SEC Proposes Rules to Enhance and Standardize Climate-Related Disclosures for Investors. [online] Available at: <https://www.sec.gov/news/press-release/2022-46> [Accessed 21 March 2022].