Investing in the Age of AI
Climate, Regulatory ComplianceArticles, Podcasts

Regulatory Update: SEC and California Climate Rules

Published: March 14, 2024
Modified: August 14, 2025
Key Takeaways

Transcript:

On the 6th of March 2024 the US Securities and Exchange Commission -or SECFINALLY published its long awaited rule on climate-related disclosures. The rules will, for the first time, mandate that SEC registrants, mostly listed companies, report on the impact of climate-related risks to their business, as well as the Scope 1 and 2 emissions

While this is clearly a major milestone, many commentators were disappointed with the ambition of the final rule versus the proposed rule from 2022. For example, the requirement to report on Scope 3 emissions, which we know represent around 80% of emissions globally, has been removed entirely. For Scopes 1 and 2 there is also no requirement for around 50% of registrants to report this at all and those that do report can do so subject to their own “materiality” assessment. Finally, the requirement to quantify climate risks in the financial statements now only applies to those risks related to severe weather events.

While there are reasons to be pessimistic, it is also the case that US companies may be captured by other more ambitious rules, such as the EU’s CSRD or US state legislation. One example of the latter is the California Climate Accountability Package, passed in late 2023. This rule will require Californian companies to report on climate-related risks, as well as the Scope 1,2 and 3 emissions, and covers many of the same companies captured by the SEC rule. 

While we are seeing progress, both the California and the SEC rules are already facing legal challenges. We eagerly await the outcome of those challenges and look forward to more progress on climate reporting globally.  


See here the legal challenges of the rule and the delay in its implementation.

Research and Insights

Latest news and articles

AI

What AI Adoption Really Looks Like in Finance: A Conversation at the NYSE

Clarity AI's Lillian Freiberg joins FintechTV at the NYSE to discuss AI adoption, mandate execution, and smarter investment workflows.

AI

What AI Systems Are Actually Made Of: The Architecture Explained

Modern AI systems aren't monolithic. Understanding the four layers they're built from, and what each one does, is how you evaluate tools that actually hold up in production.

Climate

The Truth in the Budget: What Green CapEx Reveals About the Climate Transition

The transition to a low-carbon economy is often framed through commitments: net-zero targets, transition plans, and long-term strategies. However, the pace and credibility of this transition ultimately depend on how capital is allocated.  Capital expenditure (CapEx) provides one of the most tangible indicators of corporate transition progress. Unlike climate targets or transition plans, CapEx reflects…