The SEC Chair just directed Corp Fin to review climate disclosures. What does that mean?

Three things to know about SEC Chair Allison Herren Lee’s statement on climate-related disclosures:

1. Corp Fin Will Review ’34 Act Disclosures – The SEC Staff will be pulling periodic reports from companies to conduct a comprehensive review for a specific topic (ie. climate risks) – and likely will publish a study of their findings at the end. This kind of review for a particular issue happens about once per decade.

2. Unknown If Comments Will Result – This review may – or may not – result in companies receiving comments on their disclosures in this area, which would require them to improve their disclosures going forward.

3. Updated Climate Guidance or Rulemaking Coming – It’s clear from the Chair’s statement that the SEC intends to update its 2010 guidance about climate – whether that happens by rulemaking or interpretive guidance remains to be seen. The statement does mention “material information” in the last paragraph.

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It’s probably no coincidence that Corp Fin just hired back my friend – Kristina Wyatt – to serve as Sr. Counsel for Climate & ESG to Acting Corp Fin Director John Coates. In this Bloomberg Law piece, Coates makes clear that ESG is his #1 priority…