GOP state financial officers are sounding the alarm over what they predict will be 'cataclysmic' consequences if the Securities and Exchange Commission (SEC) finalizes a rule that requires businesses to add their climate damage risk assessment to their financial disclosures.
The SEC voted 3-1 in March to address a lack of standardization in corporate reporting on climate risk through a new rule proposal.
If the rule is finalized, companies would have to report their direct greenhouse gas emissions, known as Scope 1, and Scope 2 their indirect greenhouse gas emissions, such as what's produced from the electricity they use to keep the lights on in their business. Large companies would have to give assurances to back up the information they provide.
The risks that would have to be reported also include physical hazards, such as owning property in flood-prone areas and transition risks, such as the effect of new governmental regulation.
Clear reporting on climate impact is meant to give investors and consumers data to determine whether they do business with companies that are irresponsible with their emissions.
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