Securities and Exchange Commission Chairman Gary Gensler testifies before Congress on July 19, 2023.Win Mcnamee | Getty Images News | Getty ImagesThe Securities and Exchange Commission on Wednesday voted 3-2 to issue a final rule that requires certain U.S. companies to disclose their risks related to climate change and how they contribute to a warming planet via greenhouse gas emissions.The 886-page rule — which follows a March 2022 proposal — establishes a disclosure framework “floor” for publicly listed companies, transparency that will help inform investors’ decisions, according to Caroline Crenshaw, an SEC commissioner who voted in favor of the rule.More from Personal Finance:Many think pensions key to achieving American DreamHow to avoid unexpected fees with payment apps’Ghosting’ gets more common in the job marketClimate disclosures aren’t mandatory under the current regime; companies make them voluntarily. They remain “uncommon in all but a few sectors,” according to S&P Global.The largest companies must start making some climate disclosures as early as fiscal 2025 and about greenhouse gas emissions as soon as fiscal 2026.’A sensible rule to protect investors'”Climate risk is financial risk,” Elizabeth Derbes, director of financial regulation and climate risk for the Natural Resources Defense Council, said in a written statement.”This is a sensible rule to protect investors: it gives them access to clear, comparable, relevant information on the measures companies are taking to manage climate risks and opportunities,” Derbes said.Overall, transparency around climate risk may be essential for investors to gauge if a company’s stock is worth holding or if its stock price is reasonable, experts said — for example, is it too expensive given high exposure to climate risk, or perhaps fairly priced considering it’s well positioned?Required disclosures include climate risks that have had — or are reasonably likely to have — a material impact on company business strategy, operations or financial condition, according to the SEC.They also include a company’s climate-related goals, transition plans, and costs and losses related to events like hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures and sea-level rise, the SEC said.”Investors want to be able to accurately price those risks and opportunities as they look medium and longer term at their investments,” especially retirement investors who may have a timeline decades in the future, Rachel Curley, director of policy …
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[mwai_chat context=”Let’s have a discussion about this article:nnSecurities and Exchange Commission Chairman Gary Gensler testifies before Congress on July 19, 2023.Win Mcnamee | Getty Images News | Getty ImagesThe Securities and Exchange Commission on Wednesday voted 3-2 to issue a final rule that requires certain U.S. companies to disclose their risks related to climate change and how they contribute to a warming planet via greenhouse gas emissions.The 886-page rule — which follows a March 2022 proposal — establishes a disclosure framework “floor” for publicly listed companies, transparency that will help inform investors’ decisions, according to Caroline Crenshaw, an SEC commissioner who voted in favor of the rule.More from Personal Finance:Many think pensions key to achieving American DreamHow to avoid unexpected fees with payment apps’Ghosting’ gets more common in the job marketClimate disclosures aren’t mandatory under the current regime; companies make them voluntarily. They remain “uncommon in all but a few sectors,” according to S&P Global.The largest companies must start making some climate disclosures as early as fiscal 2025 and about greenhouse gas emissions as soon as fiscal 2026.’A sensible rule to protect investors'”Climate risk is financial risk,” Elizabeth Derbes, director of financial regulation and climate risk for the Natural Resources Defense Council, said in a written statement.”This is a sensible rule to protect investors: it gives them access to clear, comparable, relevant information on the measures companies are taking to manage climate risks and opportunities,” Derbes said.Overall, transparency around climate risk may be essential for investors to gauge if a company’s stock is worth holding or if its stock price is reasonable, experts said — for example, is it too expensive given high exposure to climate risk, or perhaps fairly priced considering it’s well positioned?Required disclosures include climate risks that have had — or are reasonably likely to have — a material impact on company business strategy, operations or financial condition, according to the SEC.They also include a company’s climate-related goals, transition plans, and costs and losses related to events like hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures and sea-level rise, the SEC said.”Investors want to be able to accurately price those risks and opportunities as they look medium and longer term at their investments,” especially retirement investors who may have a timeline decades in the future, Rachel Curley, director of policy …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
