FACT SHEET

Enhancement and 

Standardization of 

Climate-Related 

Disclosures

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Background

The Commission began efforts to provide investors with material information about environmental 

risks facing public companies in the 1970s and most recently provided related guidance in 2010. Many 

investors are concerned about the potential impacts of climate-related risks to individual businesses. 

As a result, investors are seeking more information about the effects of climate-related risks on a 

company’s business to inform their investment decision-making. Investors also have expressed a 

need for more consistent, comparable, and reliable information about how a registrant has addressed 

climate-related risks when conducting its operations and developing its business strategy and 

financial plan. The proposed rules are intended to enhance and standardize climate-related 

disclosures to address these investor needs. Many issuers currently seek to provide this information 

to meet investor demand, but current disclosure practices are fragmented and inconsistent. The 

proposed rules would help issuers more efficiently and effectively disclose these risks, which would 

benefit both investors and issuers.

Content of the Proposed Disclosures

The proposed rules would require a registrant to disclose information about:

● The oversight and governance of climate-related risks by the registrant’s board and 

management;

The Securities and Exchange Commission proposed rule amendments that would require a domestic or 

foreign registrant to include certain climate-related information in its registration statements and periodic 

reports, such as on Form 10-K, including: 

● Climate-related risks and their actual or likely material impacts on the registrant’s business, 

strategy, and outlook; 

● The registrant’s governance of climate-related risks and relevant risk management processes;

● The registrant’s greenhouse gas (“GHG”) emissions, which, for accelerated and large 

accelerated filers and with respect to certain emissions, would be subject to assurance;

● Certain climate-related financial statement metrics and related disclosures in a note to its audited 

financial statements; and

● Information about climate-related targets and goals, and transition plan, if any.

The proposed disclosures are similar to those that many companies already provide based on broadly 

accepted disclosure frameworks, such as the Task Force on Climate-Related Financial Disclosures and 

the Greenhouse Gas Protocol.
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● How any climate-related risks identified by the registrant have had or are likely to have a 

material impact on its business and consolidated financial statements, which may manifest 

over the short-, medium-, or long-term;

● How any identified climate-related risks have affected or are likely to affect the registrant’s 

strategy, business model, and outlook; 

● The registrant’s processes for identifying, assessing, and managing climate-related risks and 

whether any such processes are integrated into the registrant’s overall risk management 

system or processes;

● If the registrant has adopted a transition plan as part of its climate-related risk management 

strategy, a description of the plan, including the relevant metrics and targets used to identify 

and manage any physical and transition risks; 

● If the registrant uses scenario analysis to assess the resilience of its business strategy to 

climate-related risks, a description of the scenarios used, as well as the parameters, 

assumptions, analytical choices, and projected principal financial impacts;

● If a registrant uses an internal carbon price, information about the price and how it is set;

● The impact of climate-related events (severe weather events and other natural conditions) 

and transition activities on the line items of a registrant’s consolidated financial statements, 

as well as the financial estimates and assumptions used in the financial statements;

● The registrant’s direct GHG emissions (Scope 1) and indirect GHG emissions from purchased 

electricity and other forms of energy (Scope 2), separately disclosed, expressed both by 

disaggregated constituent greenhouse gases and in the aggregate, and in absolute terms, 

not including offsets, and in terms of intensity (per unit of economic value or production);

● Indirect emissions from upstream and downstream activities in a registrant’s value chain 

(Scope 3), if material, or if the registrant has set a GHG emissions target or goal that includes 

Scope 3 emissions, in absolute terms, not including offsets, and in terms of intensity; and

● If the registrant has publicly set climate-related targets or goals, information about:

○ The scope of activities and emissions included in the target, the defined time horizon 

by which the target is intended to be achieved, and any interim targets;

○ How the registrant intends to meet its climate-related targets or goals; 

○ Relevant data to indicate whether the registrant is making progress toward meeting 

the target or goal and how such progress has been achieved, with updates each fiscal 

year; and

○ If carbon offsets or renewable energy certificates (“RECs”) have been used as part 

of the registrant’s plan to achieve climate-related targets or goals, certain information 

about the carbon offsets or RECs, including the amount of carbon reduction 

represented by the offsets or the amount of generated renewable energy represented 

by the RECs.

When responding to any of the proposed rules’ provisions concerning governance, strategy, and risk 

management, a registrant may also disclose information concerning any identified climate-related 

opportunities.

Presentation and Attestation of the Proposed Disclosures 

The proposed rules would require a registrant (including a foreign private issuer) to:

● Provide the climate-related disclosure in its registration statements and Exchange Act annual 

reports, for example on Form 10-K;
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● Provide the Regulation S-K mandated climate-related disclosure in a separate, appropriately 

captioned section of its registration statement or annual report;

● Provide the Regulation S-X mandated climate-related financial statement metrics and related 

disclosure in a note to its consolidated financial statements;

● Electronically tag both narrative and quantitative climate-related disclosures in Inline XBRL; 

and

● If an accelerated or large accelerated filer, obtain an attestation report from an independent 

attestation service provider covering, at a minimum, Scopes 1 and 2 emissions disclosure.

Phase-In Periods and Accommodations for the Proposed Disclosures

The proposed rules would include:

• A phase-in period for all registrants, with the compliance date dependent on the registrant’s 

filer status, and an additional phase-in period for Scope 3 emissions disclosure (see tables);

• A phase-in period for the assurance requirement and the level of assurance required for 

accelerated filers and large accelerated filers (see assurance table);

• A safe harbor for liability for Scope 3 emissions disclosure;

• An exemption from the Scope 3 emissions disclosure requirement for smaller reporting 

companies; and

• Forward-looking statement safe harbors pursuant to the Private Securities Litigation Reform 

Act, to the extent that proposed disclosures would include forward-looking statements.

For explanatory purposes, the following tables assume that the proposed rules will be adopted with 

an effective date in December 2022 and that the filer has a December 31st fiscal year-end:

Registrant Type Disclosure Compliance Date

All proposed disclosures, including GHG emissions 

metrics: Scope 1, Scope 2, and associated intensity

metric, but excluding Scope 3

GHG emissions metrics: Scope 

3 and associated intensity 

metric

Large Accelerated Filer Fiscal year 2023 (filed in 2024) Fiscal year 2024 (filed in 2025)

Accelerated Filer and 

Non-Accelerated Filer

Fiscal year 2024 (filed in 2025) Fiscal year 2025

(filed in 2026)

SRC Fiscal year 2025 (filed in 2026) Exempted

Filer Type Scopes 1 and 2 GHG Disclosure 

Compliance Date

Limited Assurance Reasonable Assurance

Large Accelerated 

Filer

Fiscal year 2023 (filed in 2024) Fiscal year 2024

(filed in 2025)

Fiscal year 2026 (filed in 

2027)

Accelerated Filer Fiscal year 2024 (filed in 2025) Fiscal year 2025

(filed in 2026)

Fiscal year 2027 (filed in 

2028)

Additional Information:

The proposing release will be published on SEC.gov and in the Federal Register. The comment period will remain open for 

30 days after publication in the Federal Register, or 60 days after the date of issuance and publication on sec.gov, whichever 

period is longer.