The Securities and Exchange Commission (SEC) has proposed rule changes that would require public companies to disclose climate change risks to their businesses, operations and financial condition. The rule, if passed, could accelerate moves to make climate change data more operational.
With sustainability increasingly becoming a boardroom issue, companies have been moving to capture more data related to their operations. Janina Nakladal, Director of Sustainability, recently highlighted the steps required to make sustainability part of your everyday operations.
These steps start with gathering data and mining processes from a bevy of systems and understanding data gaps.
According to the SEC's statement, information about climate change risks would include a disclosure of a company's greenhouse gas emissions.
The SEC's proposed rule changes would require the following disclosures and data points:
Governance of climate-related risks and risk management processes.
How climate-related risk identified have had or are likely to have a material impact on its business or financials over medium- and long-term timelines.
How climate-related risks may affect strategy, business model and outlook.
The impact of climate-related events such as severe weather on a company's financial statement.
Public companies would have to disclose greenhouse gas direct and indirect emissions.
The SEC said that its proposed rules would have a phase-in period for compliance following a comment period.
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