The latest SEC Staff comments on climate disclosure

Here’s an excerpt from this WilmerHale blog about the SEC Staff’s latest comments on the climate disclosures from public companies:

The 2023 Letters are similar to previous comment letters released in 2021 and 2022, with the 2023 Letters narrowing the focus of the topics addressed to four comment types, all of which are in line with topics addressed in the previously issued SEC Sample Letter to Companies Regarding Climate Change Disclosures:

• Comment Type 1 focuses on comparing each company’s filed disclosures to previously published information pertaining to climate change. In this comment, the staff ask why the company has chosen to provide less detailed information in their Form 10-K than is published on their website, in ESG Reports or in other relevant publications.
• Comment Type 2 asks companies to consider the impact and indirect consequences of climate-related regulation or business trends, such as an increased demand for goods resulting in lower greenhouse gas emissions or anticipated reputational risks.
• Comment Type 3 asks companies to quantify and disclose any physical effects from climate-related activity. Specifically, the staff asks companies to describe any damages related to major weather incidents, effects on third parties or consumers that in turn affect the company, and changes to insurance premiums.
• Comment Type 4 asks companies to quantify and disclose any purchases or sales of carbon credits or offsets, and any material effects on their business.