On March 6, 2024, the Securities and Exchange Commission (the “SEC”) adopted final climate-related disclosure rules in a 3 to 2 vote split along party lines. As discussed in Appendix A, the rules already face multiple legal challenges from states, businesses, and environmental groups, as well as dissent from two SEC Commissioners who question its necessity, authority, and cost. The SEC Chair and the two other Commissioners who voted in favor, as well as the SEC Staff presenting the rules for adoption, noted repeatedly that the final rule takes into account the thousands of comments, available here, that indicated the initial proposal was too onerous. The final rule, they noted, contains numerous revisions to make the rules less prescriptive, including eliminating the requirement to disclose Scope 3 greenhouse gas (“GHG”) emissions, and eliminating the financial impact metrics, which would have required disclosure of climate related impacts on each line item of a company’s consolidated financial statements. The SEC’s 886-page adopting release, and fact sheet on the final rules, are available here and here.

In this Alert, we distill the adopting release into its key aspects, with more detailed discussion included in Appendices, and, importantly, we include our advice on what to do now.

View this Governance & Securities Alert.