This webinar, "SEC Climate Rule & Materiality: Great in Principle, Harder to Apply in Practice," provides a detailed overview of the SEC's climate rule and its implications for public companies. The discussion emphasizes that all US public companies, including foreign private issuers (FPIs), are subject to the rule. Although there are some accommodations for smaller companies, the rule is generally broad and sweeping. The rule is built upon the Task Force on Climate-related Financial Disclosures (TCFD) framework, which includes governance, strategy, risk management, and metrics and targets.

The webinar highlights that the SEC climate rule is integrated into regular way filings such as the 10K and 20F. A key focus is on materiality, which is defined using the traditional US Supreme Court definition, not impact materiality. This means companies must assess what is financially material to their business rather than focusing on broader impacts on the world. Our experts discuss the importance of understanding scope 1 and 2 GHG emissions, even if they're deemed immaterial, to support materiality determinations. They also emphasize that companies need to consider climate-related risks across their entire value chain.

The speakers stress that companies should not delay action because of ongoing litigation against the rule. They recommend that businesses begin working with accountants to assess severe weather events and natural conditions, establish rigorous data and control processes, and engage cross-functionally to ensure compliance. While the rule allows for phased implementation, particularly around attestation requirements, early action is vital to ensure readiness.

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