World Accounting Report
Editorial
The US Securities and Exchange Commission (SEC) has recently put out a consultation document, which paves the way for introducing
far-reaching, mandatory disclosures on climate-related risks, including details of emissions of greenhouse gases. The 500-page
document sets out what will be required, how the data will be verified, and how it will be phased in for reporting starting
from 2024. The SEC justifies its approach by the argument that investors need information about climate risks to make informed
decisions, and they are not well-served by the current lack of consistent and comparable disclosures. The proposals are largely
based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which will soon be applied
around much of the world. One of the four SEC commissioners voted against the proposals, giving a sign of the debate that
is likely to ensue. Notably, there appears to be a political divide between Republicans, who believe the SEC is over-extending
its remit, and Democrats, who would have liked to have seen the proposals go further; for example, on disclosure of emissions
data.