SEC approves final climate disclosure rule, compliance countdown begins

The SEC passed its long-awaited climate-risk disclosure rule March 13, adopting the rule by a 3-2 vote. Chair Gary Gensler said the agency received more than 24,000 comments on the rule since it was first proposed in March 2022, including “a flurry of additional comments in the last 72 hours.” 

Gensler was joined in voting to approve the rule by Commissioners Caroline Crenshaw and Jaime Lizárraga, while Commissioners Hester Peirce and Mark Uyeda voted no. The 886-page rule was posted on the SEC’s site March 13 and is headed to the Federal Register. 

The tight vote count — compared to the unanimous approval of the Commission’s only other agenda item for the day — came as the rule was criticized by both its supporters and detractors for not going far enough and going too far, respectively. The rule will take effect 60 days after it is posted on the register. 

Approval of the final rule came down to the SEC’s newest commissioner, Lizárraga, who cast the deciding vote. Gensler said while the agency does not have a climate remit, a range of investors have indicated they are using climate-related risks to make decisions and relying on companies’ disclosures as part of that process. 

SEC Chief Economist Jessica Wachter, also director of the Division of Economic and Risk Analysis, said at the hearing that while as much as 90% of large companies release sustainability reports, much of the information is conveyed outside of SEC filings.