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On the upcoming SEC ruling

This week, I would like to discuss the upcoming SEC ruling that seeks to enhance and standardize climate disclosure. The ruling would require public companies to disclose information on climate-related risk analyses and governance practices. It is scheduled to be voted on in April. If passed, it would be a big push for companies to implement formal accounting systems to measure their climate strategies. So, in light of this material development, we would like to briefly review the proposed amendments.


The proposed rules would require a registrant to disclose the following:

  1. Scope 1 and Scope 2 Greenhouse Gas (GHG) Emissions: direct and indirect GHG emissions (Scope 1 and 2). If material, then indirect emissions (Scope 3), must also be reported.
  2. Information about Climate-Related Risks: how climate-related risks are identified, and if these risks have or could have a material impact on the company’s financial statements. This also includes the process for modeling climate-related risks, scenarios used as part of the company’s strategy and resiliency planning, and oversight of climate-related risks by the company’s board and management.
  3. The Impact of Climate-Related Events: the impact of severe weather and other climate-related events and transition activities on the company’s financial statements and estimates.
  4. Information on Publicly Set Climate Targets: for companies that have set climate-related targets or goals, the scope of activities included in the goals, how the registrant plans to meet those goals, data used to determine progress towards the goals, and if carbon offsets or renewable energy certificates have been used to achieve the goals.


The SEC is also contemplating rulings on how these topics are reported, including:

  1. Update Annual Reports and Filings – This includes providing climate-related disclosures in registration statements, as well as separate annual reports for the mandated disclosures.
  2. Update Financial Statements – Provide the mandated climate-related financial statement metrics and related disclosures in a note to its consolidated financial statements, and electronically tag both narrative and quantitative climate-related disclosures.
  3. Attestation of Scope 1 and 2 Emissions – Scope 1 and 2 emissions disclosures must be independently verified by an attestation service provider.


Many companies have been executing comprehensive ESG strategies for years now, but for those companies that still don’t have them, this may be the opportunity they’ve been waiting for. Even if your company doesn’t trade in the United States, complying with these requirements might help your company unlock financial value in other markets.


I hope you found this interesting. As usual, if there is anything we can help you with, or if there is an ESG topic you would like to know more about, please let us know.




CEO, Miranda ESG


Contacts at Miranda Partners

Damian Fraser
Miranda Partners

Marimar Torreblanca