The SEC Mandates Climate Disclosures

Columbia Energy Exchange

On March 6, the U.S. Securities and Exchange Commission (SEC) adopted new rules to standardize climate-related disclosures for public business and public offerings. Hoping to provide investors with consistent and comparable information, the Commission’s new rules require companies to disclose emissions and the expenses and losses associated with climate risks in annual filings and reports.

But critics immediately balked at the rules, questioning its legality and effectiveness.

So, how does the SEC define climate-related risks? How do their disclosure requirements compare to similar rules passed in the EU and California? And what are the critics saying?

This week host Bill Loveless talks with Shiva Rajgopal about the SEC’s climate disclosure ruling and his Forbes’ column on the topic, “The SEC’s New Climate Rule Is A Reasonable Political Compromise In An Election Year”.

Shiva is the Kester and Byrnes Professor of Accounting and Auditing at Columbia Business School. His research interests span financial reporting, earnings quality, fraud, executive compensation and corporate culture. From 2017-2019, Shiva served as the vice dean of research for Columbia Business School and has been a faculty member at Duke University, Emory University, and the University of Washington.