ESG Regulations: US SEC Proposes Major New Climate Disclosure Requirements

The GS SUSTAIN team believes that 2022 will be a watershed year for ESG-related capital markets regulation in the US. The climate disclosure rule proposal from the SEC on March 21, 2022 opens the door for the broadest federally mandated corporate ESG data disclosure requirement ever in the US. The proposed rule’s aim is to improve the consistency, quality and comparability of company-reported climate-related risks. This would enable investors to incorporate these risks and opportunities into their fundamental assessments more effectively while simplifying and clarifying the reporting expectations for companies. The proposal comes amid a backdrop of broad shareholder support for greater and more standardized corporate ESG disclosure as well as a shifting regulatory landscape in the US. However, questions around the scope of any final rule will remain as legal challenges are anticipated.