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The reporting landscape is becoming increasingly intricate as organizations adopt or plan to adopt climate-related disclosure frameworks to ensure transparent and comprehensive reporting on sustainability matters. Some of the recent major regulatory developments in the sustainability landscape are the SEC Climate Disclosure Rules announced in March 2024; the California Climate Disclosure Laws announced in November 2023; and the European Union's Corporate Sustainability Reporting Directive (CSRD).

SEC Climate Disclosure Rules (March 2024) 

Note: As of the publishing date, the SEC has paused the implementation of the climate disclosure rules.

Earlier this year, the SEC announced their climate rules focused on enhancing transparency and accountability surrounding the disclosure of climate-related risks and opportunities. This long-awaited rule represents a step forward in the SEC's efforts to address the growing importance of climate change and related disclosures in the corporate arena. 

The new rule replaces the now outdated 2010 guidance on climate-related risks, bringing the U.S. closer in alignment with international climate-related disclosure standards. It requires companies to provide a narrative discussion of their identification, management and oversight of climate-related risks, including disclosure of their emissions footprint, similar to what is required by the TCFD framework. 

Companies will also need to disclose financial information relating to the financial impact of severe weather events. This includes capitalized costs, expenditures and losses from extreme or severe weather events such as fires, sea level rise and flooding. The provision would only apply to financial impacts that are at least 1 percent of a line item. 

Many companies will need to disclose Scope 1 and 2 emissions, even those with a relatively small market value. Attestation (assurance/auditing) for GHG emissions reporting will be required and these requirements will increase over time. 

As was expected, the SEC ruling does not require reporting of Scope 3 (supply chain) emissions. This is somewhat strange, given that on average, approximately 70 percent or more of an organization's emissions are in Scope 3. This also puts the SEC ruling at odds with both the recent California State rulings (SB253 & SB261) and other international climate disclosure requirements like CSRD in Europe (discussed below). 

California Climate Disclosure Laws SB253 & SB261 (November 2023) 

SB253 requires companies with revenues greater than $1 billion that do business in California to report annually on their emissions from all scopes, including direct emissions (Scope 1), emissions from the purchase and use of electricity (Scope 2), and indirect/supply chain related emissions which could include purchased goods and services, employee business travel, employee commuting, use of sold products, waste, and water usage (Scope 3). 

Disclosure obligations would begin in 2026 for Scope 1 and 2 emissions, and in 2027 for Scope 3 emissions, with measurement and reporting to be undertaken as required by the Greenhouse Gas Protocol standards. Third-party assurance for their emissions reporting is also required to be obtained, starting with a limited assurance level in 2026 for Scope 1 and 2 emissions, at a more stringent reasonable assurance level in 2030, and at a limited assurance level for Scope 3 in 2030. 

SB261 applies to U.S. companies doing business in California with revenues greater than $500 million to prepare a report disclosing their climate-related financial risks, in accordance with the TCFD framework, and to discuss measures they are taking to reduce those risks. SB261 requires first disclosures in 2026 and every two years thereafter. 

European Union's Corporate Sustainability Reporting Directive (CSRD)  

Starting in 2025, the EU will require more than 50,000 organizations worldwide to begin disclosing information about their sustainability and environmental, social and governance (ESG) practices, with a particular focus on the impact of their activities on people and the environment. 

The Corporate Sustainability Reporting Directive (CSRD) replaces the EU's former ESG reporting program (the NFRD) and raises the standard in sustainability reporting, covering categories beyond carbon, including biodiversity, pollution, water and waste. The CSRD's technical rules define what companies need to disclose and how. These disclosures in the various categories will form part of annual reports alongside financials and will also be subject to audit assurance.

Companies covered by the CSRD:

  • Large, listed companies, banks and insurance companies that are already subject to the NFRD      
  • All other listed EU companies 
  • Listed European SMEs 
  • Large private European companies 
  • Non-European companies with significant business in the EU. 


As organizations navigate these changes, it is becoming increasingly apparent that reliable climate-related disclosures are essential for informed decision-making and sustainable practices. If you need guidance on how to adopt these frameworks, contact us


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