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The agency did not respond to questions from E&E News about when the agency began issuing the comment letters, which industries have received them or whether companies would be asked to update their most recent 10-Ks with relevant information.īut late yesterday afternoon, the SEC posted to its website an example of a letter the agency might send to a company regarding the climate-related information it embedded - or failed to embed - in recent securities filings. The recent comment letters are “essentially the SEC more dutifully enforcing the 2010 climate disclosure guidance that it has over the last decade,” said Gregg Gelzinis, an associate director at the left-leaning Center for American Progress.īut it’s also notable, Gelzinis added in an email, that the agency is “following through on its commitment and taking action even before the new disclosure rule making is advanced.” The eventual rulemaking would serve as an update to the agency’s existing climate-related guidance - which was released over a decade ago and most agree was never actively implemented or enforced. SEC Chair Gary Gensler has made it clear since he took office in April that climate risk is among his top priorities and that the agency under his leadership would develop rules to ensure companies provide more robust and consistent climate information. It doesn’t come as a surprise that the agency has started to pressure companies on the issue.
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And also a data-gathering exercise," Moloney added. Because this is sort of a wake-up call, if you will, is what they’re signaling. “It’s probably in its infant stages now, it’s probably not a sweep yet, but I would suspect by the end of the year you will hear about triple digit - 300 to maybe 500 letters - going to companies. This is just part of a commission- or corporation finance-wide” effort, Moloney said. “When you start seeing with very similar comments being applied to different companies in different industry groups … this is not just one or a few people putting these letters out.
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Notably, the SEC’s Division of Corporation Finance has sent letters to companies in a range of sectors, including those that aren’t particularly carbon intensive. The letters differ depending on the company.īut generally, Moloney said, they prod companies to submit additional information about the risks they face from the clean energy transition, impending environmental regulation and mounting climate impacts - as well as the extent to which they include those risks in their financial disclosures. He said that trend is significant because it marks a notable departure from the “meager” number of climate-related comment letters the SEC has sent to companies over the last decade. The firm has observed a “substantial uptick” in climate-related comment letters of this nature, said James Moloney, a partner at Gibson Dunn who used to work at the SEC.