Regulation Database – Securities and Exchange Commission

Rules, Guidance, and Forms

On April 11, 2022, the Securities and Exchange Commission (SEC) proposed a rule under the Securities Act of 1933 and Securities Exchange Act of 1934 to require registrations to provide certain climate-related information in their registration statements and annual reports. Under the proposed rule, registrants would be required to disclose climate-related risks that are reasonably likely to have a material impact on their business, results of operations, or financial condition. Registrants would also have to disclose their greenhouse gas emissions, along with certain climate-related financial metrics. Registrants’ greenhouse gas emissions disclosures would include direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions, along with greenhouse gas emissions generated by suppliers and partners (Scope 3), when those emissions are material or included in a company’s emissions targets.

In February 2010, the Securities and Exchange Commission (SEC) published this interpretive release to provide guidance to public companies regarding the Commission’s existing disclosure requirements as they apply to climate change matters.

On September 29, 2021, the Security and Exchange Commission proposed amendments to Form N-XP under the Investment Company Act of 1940. The proposed amendments would require disclosure of proxy voting records on a variety of issues, including issues pertaining to the environment and climate, such as greenhouse gas emissions. The requirements would apply to mutual funds, exchange-traded funds, and certain other funds. If adopted, the proposed requirements would complete implementation of section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

On June 17, 2022, the Securities and Exchange Commission (SEC) proposed amending rules and forms to enhance disclosure requirements for ESG (environmental, social, and governance) investment practices. The proposed rules would apply to certain registered investment advisers, advisers exempt from registration, registered investment companies, and business development companies.

The proposal would categorize various ESG strategies and require funds and advisors to provide more specific disclosures. For funds focused on the consideration of environmental factors, the proposal would require the disclosure of the greenhouse gas emissions associated with portfolio investments. Furthermore, the proposal would require funds claiming specific ESG impacts to describe the specific impacts they seek to achieve and summarize their progress in achieving them.

On May 25, 2022, the Securities and Exchange Commission (SEC) proposed amending its fund “Name Rule” to limit misleading names for investment funds, including funds focusing on environmentally-sustainable investments. In addition to amending notice and recordkeeping requirements, the proposal would require certain funds to adopt a policy to invest at least 80% of their assets in accordance with the investment focus that the fund’s name suggests.

Other Initiatives

On March 4, 2021, the Securities and Exchange Commission announced the creation of a Climate and ESG Task Force in the Division of Enforcement. Consistent with increasing investor focus and reliance on climate and ESG-related disclosure and investment, the Climate and ESG Task Force will develop initiatives to proactively identify ESG-related misconduct.