The SEC recently issued a widely anticipated proposal (Proposal) for rules (Rules) requiring public companies to disclose “information about a registrant’s climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition,” according to the Proposal. If adopted, the Rules would expand both the scope and specificity of climate-related disclosures for both U.S. public companies and foreign private issuers. A recent Sullivan & Cromwell (S&C) program examined the five key elements of the Proposal: the disclosure rules for greenhouse gas emissions; climate-related risk and impact; transition plans and climate-related metrics/targets; climate-related financial metrics; and governance. The program featured S&C partners Catherine M. Clarkin, Robert W. Downes, Sarah P. Payne and Marc Treviño, as well as senior policy advisor and counsel, and former SEC Chair, Jay Clayton. This article, the first in a two-part series, covers the five key elements of the Proposal. The second article
will explore the broad implications of the Proposal; key challenges and timing; and the anticipated pushback. For coverage of other recent SEC rulemaking, see our two-part series: “Proposed Amendments to Form PF Require More PE Sponsors to File and One‑Business‑Day Reporting Criteria
” (Feb. 22, 2022); and “Practical Impact on PE Sponsors of the Proposed Amendments to Form PF and Reasons for Industry Backlash
” (Mar. 1, 2022).