The SEC is considering phasing in its anticipated requirements for companies to report their greenhouse gas emissions and climate change risk management plans, agency Chair Gary Gensler said.
The Securities and Exchange Commission is looking at tiered compliance for small and large companies and the different types of climate disclosures that may be required, Gensler told the House Financial Services Committee Tuesday.
“Some reporting will be easier to do sooner,” he told House lawmakers.
The SEC is expected to propose rules as early as this fall that could have companies report their climate risk in their annual 10-Ks or other public filings.
The agency may require quantitative reporting by companies that includes greenhouse gas emissions and the financial impacts of climate change, Gensler has said. Some qualitative disclosures under consideration would cover how executives manage climate risks and opportunities, and how climate change factors into a company’s business strategy.
Gensler said the SEC is mulling whether to “phase” in its new rules based on company size,"and also amongst the different types of disclosures.”
The chair’s remarks were his most direct comments to date on compliance for companies that would have to follow the agency’s new climate disclosure rules.
“I’m really looking for, with the support of my fellow commissioners, to try to put something out to public comment,” Gensler said.
The agency is looking at challenges companies face in reporting greenhouse gas emissions or governance and strategies related to climate, Gensler said.
The SEC must ensure that its new climate disclosure regulations don’t hurt the ability of small companies to compete with big ones, Rep. Frank Lucas (R-Okla.) said at the hearing.
“Publicly traded companies are at varying stages of climate and ESG disclosure and related reporting, and climate modeling are still an evolving practice,” he said.