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SEC’s Proposal has Implications for Climate-related Disclosures for ESG:Real Time Data?

Updated: Apr 26, 2022

The News:

On March 21, 2022, the Securities and Exchange Commission (“SEC”) released proposed rules on climate disclosures for publicly traded companies entitled “The Enhancement and Standardization of Climate-Related Disclosures for Investors.” This sets the stage to require more companies to collect and validate their greenhouse gas (GHG) emissions data.

The SEC has cautioned filers about using “boilerplate” information and requires filers to provide this information in a meaningful way and went so far as to say that disclosers need to eventually provide “reasonable assurance” of the accuracy of the data provided.

The Implications

The SEC’s proposed rule reflects a paradigm shift in the content of financial disclosures relative to climate change matters, including GHG emissions. That opens the door to a range of independent verification measures, from a third-party attestation to the collection of real-time data. As this data will be under greater scrutiny, the need for more accurate information or real-time monitoring of certain GHG emissions sources may be necessary. GHG emission sources that AirLogics has the ability to monitor could be affected, such as methane monitoring from oil and gas sources or landfills – to name a few.

How Does This Impact Current Regulations?

For many organizations, the SEC proposal has the potential to go beyond the current state and federal regulatory frameworks with regard to addressing GHG emissions impacts. This may prompt filers of SEC disclosures to collect improved GHG emissions data that measures and assesses not only their impacts but also their efforts to reduce those emissions. This dovetails into substantive Environmental Social Governance (EGS) issues and how organizations are currently disclosing such information and ensuring it is accurate.

And Now What?

The adage that “you can’t improve something until you can measure it” seems to apply here. If the SEC is requiring “reasonable assurance” of the accuracy of GHG disclosures, and investors are interested in real and meaningful efforts to reduce GHG emissions, collecting complete and accurate data will be important for those organizations impacted by the SEC proposal.

Here at AirLogics, we have over 24-years of experience conducting real-time perimeter air monitoring. We can help you meet current needs for hard data, while anticipating future concerns from stakeholders and regulators. To learn more, contact… or call 908-803-1014.

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