The Securities & Exchange Commission recently proposed rule changes that would require all listed firms with US operations, including financial institutions, to include climate disclosures in their periodic reports, particularly information on climate risks likely to have a material impact on their business, and disclosure of the firm’s greenhouse gas (GHG) emissions.  This requirement for climate-related data will also be highly useful to institutional and other investors in these firms.

In line with other recent regulatory statements on climate risk, the SEC publication is remarkable for just how comprehensive and far-reaching its climate risk management requirements will be.  It won’t be sufficient for a firm to focus on submitting periodic reports to supervisors – the SEC make it clear that they will be scrutinising every aspect of a firm’s climate risk management framework, including board oversight, other governance, risk management processes, emissions reporting, targets, goals, transition plans, and other detail on how their climate risks are identified, assessed, and managed.

The SEC is following similar recent statements made by other US financial regulators, including the OCC and FDIC – and it finally brings the US regulators into line with the UK and European regulators’ positions on climate risk management.

Here at Acin, we are rolling out our new climate risk & control network platform to our first two customers, with others getting ready to join the growing network.  The platform already covers the necessary risks & controls inherent in the requirements mapped out by the SEC and other major financial regulators, and we continue to keep the platform dynamic by adding new risks & controls as they emerge.