{"id":5242,"date":"2022-08-12T19:01:27","date_gmt":"2022-08-12T10:01:27","guid":{"rendered":"https:\/\/codo.jp\/?p=5242"},"modified":"2026-09-16T13:49:07","modified_gmt":"2026-09-16T04:49:07","slug":"everything-you-need-to-know-about-the-new-sec-rules","status":"publish","type":"post","link":"https:\/\/codo.jp\/en\/everything-you-need-to-know-about-the-new-sec-rules\/","title":{"rendered":"Everything you need to know about the new SEC rules"},"content":{"rendered":"\n
\n

The<\/strong> Securities and Exchange Commission<\/strong><\/a>, US financial watchdog,  is about to implement a new <\/strong>regulation apparatus on climate-related risk disclosure<\/strong><\/a>. The new rules are set to come into force by the end of 2022. Companies listed in the US \u2013 including foreign companies \u2013 will be required to disclose information on their climate-related risks and impacts, to help responsible investors navigate. This major regulatory breakthrough illustrates the return of the American government into the Paris Agreement. Codo summarizes what you should know about it.<\/strong> <\/p>\n<\/blockquote>\n\n\n\n

<\/p>\n\n\n\n

Where does this new rule come from? <\/h3>\n\n\n\n

Already in 2010<\/a>, the Securities and Exchange Commission (SEC) guidance already included issues related to climate change in its disclosure protocols. Onwards, Europe took the lead in terms of non-financial reporting directives<\/a> including environmental matters (2014), closely followed up by the Task Force on Climate-Related Financial Disclosures (TCFD<\/a>) established in 2015 by the International Financial Stability Board. More recently, the EU came up with new initiatives, such as the Green Taxonomy<\/a>, a milestone in bringing more transparency to corporate environmental claims. <\/p>\n\n\n\n

The SEC\u2019s proposal on climate-related risk (CRR) disclosure also represents a significant rule change: after years of limited ambitions under the Trump administration, the world\u2019s largest economy\u2019s financial regulator is finally tackling climate change, including the fight against greenwashing. The agency started in early 2021 to highlight climate action as a hot topic, among other ESG issues. This administration-led initiative also came at a time when companies were ready to accept it: more than 75% of companies involved in the consultations supported the final proposal. <\/p>\n\n\n\n

Why is it a big rule change? <\/h3>\n\n\n\n

The purpose of the SEC\u2019s proposal is to make ESG reporting more formalized<\/em>, with a focus on the \u201cE\u201d part and more specifically climate. Investors will be able to access consistent and comparable information and better evaluate a registrant\u2019s vulnerability to climate change, as well as its contribution to it. <\/p>\n\n\n\n

In concrete terms, the SEC will require all listed companies in the US to measure and disclose their climate-related risks<\/em>, covering both the impacts of the company on climate change and the financial risks that climate change represents for the company. This \u201cdouble materiality\u201d principle is also adopted by the EU in its upcoming Corporate Sustainability Reporting Directive (CSRD). <\/p>\n\n\n\n

Such requirements are in many aspects different from classic financial reporting. Firms will be required to care for things that are arguably beyond their immediate control scope: while, unfortunately, no company can by its sole actions stop climate change, all can be expected to be taking action to limit their contribution. Beyond quantitative data provision, firms will also be expected to follow a qualitative narrative, including programs and commitments. Beyond financial stability metrics, firms will also be asked to think about their resilience in a prospective manner and to position themselves accordingly. <\/p>\n\n\n\n

What companies, what timeline? <\/h3>\n\n\n\n