The final rules reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules.

According to a fact sheet posted by the SEC, the final rules will require a registrant to disclose, among other things:

• material climate-related risks;
• activities to mitigate or adapt to such risks;
• information about the registrant's board of directors' oversight of climate-related risks and management’s role in managing material climate-related risks; and
• information on any climate-related targets or goals that are material to the registrant's business, results of operations, or financial condition.

In a major change to the proposed rule, the SEC has decided to remove the requirement to disclose Scope 3 greenhouse gas (GHG) emissions and only require disclosure of Scope 1 and/or Scope 2 GHG emissions on a phased-in basis by certain larger registrants when those emissions are material.

All domestic and foreign registrants, except for asset-backed issuers, must provide the

disclosures. smaller reporting companies (SRCs), emerging growth companies (EGCs), and nonaccelerated filers are exempt from the Scope 1 and Scope 2 GHG emission disclosure requirements but must provide all other disclosures.

The final rules will become effective 60 days after publication in the Federal Register, and compliance will be phased in from 2025 to 2033.

Access the final rule,  fact sheet and  press release on the SEC’s website.