SEC’s Climate Proposal Tees Up Test of ‘Material’ Info Standard

The SEC’s proposed climate disclosure rule will likely test the boundaries of a legal standard that the agency relies on to compel companies to produce information that’s material to investors.

The agency’s proposal not only requires publicly traded companies to disclose their own emissions, but those of suppliers and even customers, if they are material.

Tracking such “Scope 3" emissions could require a massive amount of work, said Jonathan Brightbill, chair of Winston & Strawn’s environmental litigation & enforcement practice. If the proposal is finalized as a rule, the SEC will likely need to prove that investors are truly demanding ...