2021-06-21-安永-Three_ways_accountants_will_lead_on_climate_action_29页_120kb

SEC Interpretive Release on Climate Change Disclosures

Purpose

The Securities and Exchange Commission (SEC) issued this interpretive release to provide guidance to public companies on how existing disclosure requirements apply to climate change matters. It outlines how federal securities laws and regulations, such as Regulation S-K, should be applied to climate-related issues, effective from February 8, 2010. The guidance aims to assist companies in fulfilling their disclosure obligations and addressing potential impacts from climate change, including regulatory developments, physical risks, and business trends.

Background

This release addresses climate change as a significant concern due to scientific, regulatory, and economic impacts. Recent developments include federal, state, and international regulations (e.g., the EPA's reporting requirements and the Kyoto Protocol), which may lead to "cap and trade" systems. Climate change can affect businesses through increased operational costs, financial risks, and physical hazards like extreme weather events. Shareholder and public pressure have also grown, with voluntary reporting mechanisms like The Climate Registry gaining prominence.

Key Disclosures

• Regulatory Changes: Companies must disclose material capital expenditures, risks, and impacts of greenhouse gas legislation under SEC rules. For instance:

  • Item 101 of Regulation S-K requires disclosure of environmental compliance costs.
  • Item 103 covers pending legal proceedings related to climate change.
  • Item 503(c) mandates risk factor discussions, including potential direct or indirect risks from climate policies.
  • Item 303 requires Management's Discussion and Analysis (MD&A) to address material trends affecting financial condition or operations.

• International Accords: Companies should report on material impacts of international agreements, such as the Kyoto Protocol or EU Emissions Trading System, based on materiality.

• Physical Risks: Disclosures should include effects from climate events, like hurricanes or floods, on operations, assets, and supply chains.

Application

Companies must evaluate materiality under the standards weighty information likely influences investment decisions. This release covers diverse areas, including costs of compliance, revenue changes from new opportunities, reputational risks, and severe weather impacts. Guidance is outlined for domestic and foreign private issuers under Form 20-F or registration forms.

Conclusion

The SEC will monitor company filings for compliance and may seek further guidance or rulemaking based on experiences and input from stakeholders. This interpretive release emphasizes the importance of incorporating climate change discussions into ongoing disclosures under existing regulations, without creating new obligations.