The U.S. Securities and Exchange Commission’s landmark climate change proposal thrusts the Wall Street regulator into a role it usually takes pains to avoid: setting accounting rules.
Almost 50 pages of the 500-plus page plan the agency issued Monday covers details of new financial statement disclosures big companies would have to make about climate change’s impact on financial statement metrics and how much they spend to combat risk.
The companies also would have to explain how they made the financial estimates and assumptions. If the rules are finalized, these footnotes would be part of companies’ audited financial statements—not the risk ...