Acting SEC Chair Allison Herren Lee directed the commission’s Division of Corporation Finance on Wednesday to enhance its focus on climate-related disclosure in public company filings.
The division’s staff will review the extent to which public companies addressed the topics identified in 2010 SEC guidance regarding disclosure of climate change matters. The staff also will:
- Assess compliance with disclosure obligations under the federal securities laws;
- Engage with public companies on climate-related issues;
- Absorb lessons on how the market currently is managing climate-related risk; and
- Use insights from this work to begin updating the 2010 guidance to take into account developments that have occurred in the 11 years since that guidance was issued.
Lee’s directive comes as interest in the issue of combating climate change is growing throughout the financial reporting spectrum. Investors have made demands of companies related to sustainability, and recent commitments by manufacturers to increase production of electric automobiles have been at the forefront of climate-conscious actions in the business community.
It’s expected that these moves will create opportunities for CPAs to perform independent assessments of the reliability of climate-related disclosures.
“Now, more than ever, investors are considering climate-related issues when making their investment decisions,” Lee said in a statement. “It is our responsibility to ensure that they have access to material information when planning for their financial future.”
Lee said the SEC needs to take immediate steps to ensure compliance with the current rules and to update existing guidance to produce consistent, comparable, and reliable client-related disclosures.
— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA’s editorial director.