SEC extends comment period for climate rule to June

WASHINGTON — The Securities and Exchange Commission will extend the public comment period for its landmark climate disclosure proposal by 30 days, the agency announced Monday. 

The proposed rulemaking, unveiled in March, would require many banks and other publicly traded companies to disclose standardized information about their climate risk exposure and carbon emissions. 

SEC Chair Gary Gensler Testifies Before Senate Banking Committee
Gary Gensler, chairman of the U.S. Securities and Exchange Commission, speaks during a Senate Banking, Housing and Urban Affairs Committee hearing in Washington, D.C., U.S., in September.

The public comment period for the proposal, which ran more than 500 pages, was originally set to end in mid-May, 30 days after being published in the Federal Register. The SEC’s new deadline adds 30 days to the period, making the deadline June 17. 

"The SEC benefits greatly from hearing from the public on proposed regulatory changes,” Chair Gary Gensler said in a press release. “Commenters with diverse views have noted that they would benefit from additional time to review these three proposals, and I'm pleased that the public will have additional time to provide thoughtful feedback."

The proposal is a high-water mark for the American government’s oversight of public firms’ relationships to climate change. Among the proposed disclosures, companies will be required to calculate three categories of emissions, ranging from a company’s direct carbon footprint, indirect emissions in the form of purchased energy, and emissions from “upstream and downstream activities in a registrant’s value chain” — otherwise known as Scope 3 emissions. 

SEC climate disclosure plan presents challenge for banks

Banks large and small have worried that such a mandate could carry a crushing regulatory burden if Scope 3 disclosures include the people and companies they lend to. According to the SEC’s proposal, firms would be required to disclose Scope 3 emissions if they are “material,” and the regulatory framework would also include a safe harbor provision from certain federal securities laws.

Beyond emission disclosures, the SEC’s climate rule would also direct public firms to identify and disclose the broader risks that climate change may pose to their business, including from societal energy transition and extreme weather events.  

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Politics and policy Climate change
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