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SEC Chair Gensler Silent on Climate Disclosure Rule Timeline

SEC Chair Gary Gensler faced questions from members of Congress regarding the timeline for approving the Securities and Exchange Commission's (SEC) climate-related disclosure rule for public companies.

During a Senate Committee on Banking, Housing, and Urban Affairs hearing, Senator Tina Smith inquired about when the rule might be finalized, to which Gensler responded, "I don't want to be pinned down on this one. There is a very heavy comment file, and some really important issues have been raised."

Gensler went on to explain that the SEC had received more than 16,000 comments on the rule, stating, "We do not do this against a clock; it’s really when the staff is ready and the commission is ready."

Senator Elizabeth Warren expressed frustration with the slow progress of the SEC's rulemaking process but did not press Gensler for a timeline.

In the SEC's spring 2023 rule list, the climate-related disclosure rule was marked as one of 37 in the final stage, with the possibility of a revamped rule and decision by October. Gensler indicated that the commission might take more time to respond to comments and incorporate feedback into an amended rule.

Reports in February suggested that the SEC was considering changes to certain contentious aspects of the proposed rule, including the bright-line test for disclosing climate-related costs and risks affecting more than 1 percent of a financial report's line item. Additionally, there were discussions about the requirement to report Scope 3 greenhouse gas emissions generated by a firm's vendors and supply chain.

During the hearing, Gensler acknowledged that many comments focused on the rule's requirement for public companies to gather and report their Scope 3 emissions. He reiterated the SEC's commitment to applying the rules solely to public companies and not indirectly affecting private companies. However, some private companies that have public company customers or serve government contracts are contemplating compliance with the rule if approved.



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