Sphera’s Post

The long-anticipated climate-related disclosure rules for large public companies from the U.S. Securities and Exchange Commission (SEC) have been finalized, and interestingly do not require Scope 3 disclosures. Still, the need to report will remain an important part of compliance for qualifying companies under other regulations. Sphera has summarized the implications in an informative blog post.

A few takeaways: • Disclosure of Scope 1 and Scope 2 emissions is now mandated for certain U.S. companies, with varying assurance levels required. • Regulations from the EU and California will still require many U.S. companies to report Scope 3 emissions, affecting global operations. • Reporting practices are becoming increasingly important for compliance with diverse and evolving international sustainability regulations. If you want to talk to an expert about how to get started, follow the link below 👇 for expert’s support in the topic. https://lnkd.in/g96Q3Fj7 #esgreporting #regulatorycompliance #sphera

EHS&S Professionals - Just a heads up, the U.S. SEC voted to finalize the climate-related disclosure rules for large, publicly traded companies. Under the finalized SEC rules, disclosures of Scope 1 and Scope 2 emissions (if deemed material) are required from large accelerated filers. Click the link below to learn more about the SEC’s final ruling. #regulatorycompliance #SEC

Scope 3 will be a focus for large companies regardless of SEC rule outcome, KPMG says. Large companies will still need to track scope 3 emissions as part of California and European Union requirements, analysts said. (quoted from the article) Companies will need to report scope 3 emissions to comply with California climate disclosure laws, the European Union’s Corporate Sustainability Reporting Directive and the International Sustainability Standards Board’s framework, they noted. The SEC disclosure requirements would mean companies would have to disclose climate-related risks that are 1% or higher of a total line item in their financial statements. (In line item accounting, each income and expense component is categorized in a different segment on a company’s balance sheet.) By contrast, the CSRD’s reporting obligations are far more extensive and include a double materiality standard, requiring companies to report how climate-related risks affect a company’s financial performance as well as broader impacts on people and the environment. “If companies have to comply with the CSRD, they’re probably 75% to 80% of the way there in terms of generating the information that they need to comply with the SEC,” Hodge said. #climatedisclosures https://lnkd.in/gVFUkFCC

Exciting developments in environmental disclosure! 🌍 The U.S. Securities and Exchange Commission (SEC) recently greenlit a groundbreaking climate-related disclosure rule, effective March 6th. This mandates publicly traded companies to unveil their climate action plans, greenhouse gas (GHG) emissions, and the financial impacts of severe weather events. Notably, both Scope 1 and Scope 2 GHG emissions reporting is now mandatory. But what's the impact on your organization? The reality is, gathering data on GHG emissions can be a colossal task for many, demanding significant human capital and potentially jeopardizing other projects. Here's the good news: Did you know that Flexera offers a streamlined solution for reporting on Scope 1, 2, and even 3 GHG emissions for your technology assets, including those in the cloud? 🌐 Curious to learn more about the SEC's new disclosure rule and its implications? Dive into the insights provided by Forbes: https://lnkd.in/gg_KSHic Considering the complexity of your GHG reporting needs? Reach out directly to explore how Flexera might be the right fit for your organization! Let's embark on this sustainability journey together. 🌿 #ClimateDisclosure #GHGReporting #SustainabilityInTech

Important SEC Climate Regulation Update: The SEC has dropped a requirement for U.S.-listed companies to disclose Scope 3 emissions. SEC Chair Gary Gensler told an event held by the U.S. Chamber of Commerce in October that he hoped the emissions disclosure rules, which received some 16,000 public comments, will survive any legal challenges once they are finalized and adopted. Last year, California adopted a law that will require companies active in the state to disclose Scope 3 emissions as early as 2027. Corporate lobbyists said companies would still be reluctant to disclose Scope 3 emissions in SEC filings, even if they produced them for California, because including such information in securities filings gives grounds for more lawsuits from investors. Some voluntary initiatives such as the International Sustainability Standards Board already specify that it is best practice to disclose Scope 3 emissions. "There is no question Scope 3 reporting is important, because otherwise you risk presenting a somewhat misleading picture of the company's greenhouse gas emissions," said Ben Schiffrin, director of securities policy at Washington, D.C-based consumer and investor advocacy group Better Markets. Quoted from Reuters. #sustainability #esg #scope3

SB 219, signed into law in October, makes significant amendments to California’s climate disclosure laws, particularly SB 253 (Climate Corporate Data Accountability Act) and SB 261 (Climate-Related Financial Risk Disclosure Act). It strengthens corporate climate reporting standards and aligns California with global best practices, ensuring that companies provide comprehensive data on their greenhouse gas (GHG) emissions and climate-related risks. Who Is Covered? SB 219 impacts large corporations that meet the following criteria: SB 253: Public and private companies operating in California with annual revenues exceeding $1 billion. SB 261: Public and private companies with annual revenues between $500 million and $1 billion. These companies are required to disclose their GHG emissions and provide assessments of their financial exposure to climate-related risks.: SB 253 (Amended): 2026: Mandatory reporting of #Scope1 and #Scope2 GHG emissions (direct and indirect emissions from owned operations). 2027: Reporting of #Scope3GHG emissions (supply chain and customer-related emissions) is required. SB 261 (Amended): 2026: Companies must submit climate risk disclosures detailing material risks to their operations based on the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. Key Requirements #Scope1,#Scope2, and #Scope3 Emissions: Companies covered by SB 253 must disclose their Scope 1 (direct), Scope 2 (indirect from purchased electricity), and Scope 3 (value chain) emissions. The legislation demands rigorous transparency across all three. #TCFDAlignment: #SB261 requires climate risk disclosures in line with the #TCFD’s globally recognized framework, emphasizing physical risks, transition risks, and financial impacts of climate change. Changes to SB 253 and SB 261 #ReportingDeadlinesMaintained: The core reporting deadlines for 2026 remain in place, sending a clear message about California's commitment to rapid climate action and transparency. #ExtendedRuleMaking Period: SB 219 extends the #CaliforniaAirResourcesBoard's (#CARB) deadline for issuing regulations under SB 253 to July 1, 2025 - a six-month extension. This creates a compressed timeline for companies to prepare once final regulations are issued. #ConsolidatedReportingAllowed: SB 219 permits consolidated reporting at the parent company level for #SB253 emissions disclosures, potentially simplifying the process for complex corporate structures. #FlexibleScope3Timeline: #CARB now has discretion to specify the 2027 deadline for #Scope3 emissions disclosure, rather than the original 180 days after #Scopes1 and 2 disclosure. Fee Requirement Removed: The requirement for companies to pay annual fees when filing SB 253 or SB 261 reports has been eliminated. Increased Transparency: SB 219 will significantly enhance the visibility of corporate #GHGemissions, helping investors, regulators, and stakeholders evaluate companies’ climate impact and risk expose

The SEC's new climate disclosure rules adopted March 6, 2024 (read here: https://lnkd.in/g8b8-BDJ) primarily affect publicly traded companies in the US, including sectors from retail to tech and oil and gas. Here are the key highlights: 1. Affected Parties: The rules apply broadly to SEC registrants, excluding registered investment companies, asset-backed issuers, and certain Canadian issuers. 2. Disclosure Requirements: Companies must disclose material climate-related risks, their mitigation strategies, and the financial impact of climate events. 3. Board & Management Oversight: There's a focus on the role of the board and management in overseeing and managing climate-related risks. 4. GHG Emissions Reporting: Larger registrants must report Scope 1 & 2 greenhouse gas emissions, with a phased-in attestation requirement. 5. Financial Impact: Companies need to disclose the financial statement effects of severe weather and other natural conditions. The rules aim to provide investors with consistent and reliable information on how climate-related risks impact financial performance and position. This move is expected to increase transparency and could lead to significant changes in how companies approach climate-related issues and reporting. Want some help making sense of the new rules and what they mean for yor business?Parallel Labs is here to help. #esg #esgstrategy #climate #disclosure #compliance #sustainability #sustainablebusiness

On Earth Day, we reflected on our environmental commitments, and this year, it coincided with significant regulatory developments in climate disclosure. The U.S. Securities and Exchange Commission (SEC) has issued a climate disclosure rule, which is currently facing legal challenges that delay its implementation. What does the rule entail? Despite being less robust than initially proposed, it requires companies to disclose material climate-related risks and the measures taken to mitigate them, including board oversight and management roles in these efforts. It also outlines phased disclosure of Scope 1 and 2 greenhouse gas emissions for larger registrants, based on materiality. However, the rule has sparked both legislative and judicial challenges, highlighting the complex landscape of climate regulation. States are also stepping up, with varying approaches to climate and ESG reporting. This evolving scenario poses significant implications for financial services and technology sectors. Dive deeper into the impacts of these regulations and state-led initiatives on businesses and the broader economic landscape in our recent blog. #ClimateChange #ESG #FinancialServices #Regulation #SEC #EarthDay https://lnkd.in/gQBSaU9y

Mandatory #climatedisclosure for U.S. companies is here. In several key jurisdictions, companies will be required to disclose climate-related information within the next few years. This post published on the blog of the Harvard Law School Forum explores three legal regimes relevant to U.S. companies: 🔺 California’s S.B. 253 and 261 🔺 U.S. Securities and Exchange Commission’s (SEC) proposed climate-related disclosure rule 🔺 the European Union’s Corporate Sustainability Reporting Directive (#CSRD) Companies need to 1. determine what disclosure rules will apply to them 2. put into place the necessary infrastructure to be in a position to develop, collect and report the information called for by applicable requirements. About the current status of the #SECclimaterule: "While it is impossible to predict what the final rule will look like, expectations are that it may differ significantly from the proposed rule, specifically with respect to disclosure requirements relating to #scope3emissions and the thresholds for climate-related financial metrics." #sustainabilityreporting #sustainabilitystandards https://lnkd.in/d93nr2jB