A Guide to the 2022 SEC Climate Disclosure Rules

On March 21, 2022, the U.S. Securities and Exchange Commission (SEC) issued a new regulatory proposal that would mandate climate disclosure within financial reports. As of May 2022, the comprehensive document is in its final stages of public comment (ending May 20) before its anticipated approval. The regulatory document is over 500 pages in length and can present a challenging read for businesses and individuals not caught up to speed on certain levels of expertise and context, both in the field of sustainability and finance. The proposed SEC regulations are meant to clarify and simplify investor demands in climate disclosure that are increasing in volume for businesses.

Crossing the threshold from voluntary ESG/sustainability/ and climate risk disclosure to mandatory disclosure may invoke monumental shifts in capital markets and the business-as-usual operational strategies across all industries and company sizes as the ripple effects trickle down into smaller public and private entities. This guide is meant to outline and clarify what the robust regulatory document mandates, what to expect in terms of impacts of the regulatory changes, insights into why this shift in financial and sustainability reporting is occurring, and how to prepare as a corporate entity for the future of sustainability reporting.