Companies weigh in on proposed SEC climate disclosure rule

WASHINGTON — The Securities and Exchange Commission moved closer Friday to a final rule that would dramatically alter what public companies tell shareholders about climate change — both the risks it poses to their operations and their own contributions to the problem. For example, the SEC’s rule would force companies to disclose in annual statements whether climate change is expected to affect more than 1% of a line item and explain how. “It’s a lot more detailed than many other financial reporting requirements.” Companies would also have to report on the physical impact of storms, drought and higher temperatures brought on by global warming. In a March statement, the U.S. Chamber of Commerce called the proposal overly prescriptive, saying that as written, the rule would “limit companies’ ability to provide information that shareholders and stakeholders find meaningful.” Auditing firms, trade groups and some lawmakers have repeatedly pointed to the proposal’s inclusion of companies’ indirect effects on the climate — known as Scope 3 emissions — as a thorny area to report on. The SEC’s climate disclosure rule would standardize what public companies report.