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Securities and Exchange Commission (SEC) Chair Gary Gensler has asked agency staff to submit a proposal for mandatory climate risk disclosures for consideration by the end of 2021. Such reports may be required in an expanded Form 10-K and describe a company’s direct and indirect carbon emissions, including those by suppliers and partners in its “value chain.”
Companies may be required to disclose both qualitative and quantitative details, including how they manage climate-related risks and opportunities in day-to-day operations and in broad strategy, Gensler said Wednesday. They may also need to report on metrics such as greenhouse gas emissions, financial impacts of climate change and progress towards climate-related goals.
“Today, investors increasingly want to understand the climate risks of the companies whose stock they own or might buy,” Gensler said in remarks during a webinar. “Investors are looking for consistent, comparable, and decision-useful disclosures so they can put their money in companies that fit their needs.”