April 25, 2022
The Securities and Exchange Commission's proposed rule amendment is necessary because foreign or domestic registrants should be required to disclose certain environmental or climate-related information. Without the release of climate-related risk, there is no complete and encompassing view of a business. Due to the growing concern with global warming and greenhouse gas emissions, companies must disclose their emissions and how they are handling such issues. Information regarding accelerated filers is essential because it gives a record of the fiscal business year and allows for better categorization of a business.
The need for change began in the 1970s and has continued to 2010 and was finally addressed. The realization came from the lack of completeness and honesty of businesses regarding disclosing pertinent information. Investors could get different information depending on their sources, which posed a risk to investors. However, establishing a clear, consistent, and concise way of divulging information takes some risks out of the equation.
What is enjoyable about the amendment is that it holds companies accountable for their businesses and their potential destruction of the environment and climate. Companies have to address how they are identifying, assessing, and managing climate-related risk. Companies must provide their plan for climate-related risks. It makes no longer acceptable to have a minimalist approach because future companies or investors will now have this information for themselves. There will be detailed information about climate-related events such as serve weather. These day-to-day occurrences may seem unnecessary however, they do have a lasting effect on the environment and whatever products or activities a company is involved in.
As for improvements, there should be a section that details the consequences for not complying with the rules. Future rules should address what sort of plans are necessary related to climate-related risks.
There is no need for clarification on any other matters at this time.