Acting SEC Chair Allison Herren Lee Issues Statement on the Review of Climate-Related Disclosure

Acting SEC Chair Allison Herren Lee issued a statement yesterday (available here) that she has directed the Staff of the SEC’s Division of Corporation Finance (the “Staff”) to “enhance its focus on climate-related disclosure in public company filings.”

This is the first significant step the SEC has made regarding climate-related disclosure since it issued its interpretative guidance in 2010 (available here).[1] With a view to updating the 2010 guidance, the Staff will:

• review the extent to which registrants are addressing the topics identified in the 2010 guidance;
• assess the compliance of companies with disclosure obligations under federal securities laws;
• engage with registrants on these issues; and
• understand how the market is managing climate-related risks.

Acting Chair Lee earlier this month signaled the importance of climate and other ESG issues with the hiring of the first senior SEC policy adviser for climate and ESG.  During the past year, in a series of public statements, she has called for enhanced disclosure requirements for climate-related issues as well as for other ESG topics.  Acting Chair Lee has been joined in her appeals by Commissioner Caroline Crenshaw and most recently John Coates, the acting Director of the Division of Corporation Finance,  who, in his widely publicized remarks at a recent webcast conference, said that the SEC “should help lead” the creation of a disclosure system for ESG issues for corporations.

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[1]       For more information, please see our prior client memorandum, The U.S. Regulatory Framework for ESG Disclosures.