Analysis of recent SEC Staff comment letters on climate disclosure

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Here’s an excerpt from this note from Dennis McGowan of the Center for Audit Quality, who reviewed 29 Corp Fin comment letters dealing with climate-related disclosures in Form 10-Ks:

My colleagues and I reviewed the companies’ climate-related quantitative disclosures and identified the following key takeaways:

● There was little uniformity in the definition or determination of climate-related capital expenses.

● When a company described costs associated with physical climate-related risks they were typically costs incurred due to property damage from severe weather events.

● Climate-related compliance costs were often described as the expenses incurred to comply with federal and state climate-related laws.

● Roughly two-thirds of the companies indicated that they did not purchase carbon credits or offsets during the reporting period.