ARTICLE
28 April 2024

Climate-Related Disclosure Rules – Update

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McCarthy Tétrault LLP

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McCarthy Tétrault LLP provides a broad range of legal services, advising on large and complex assignments for Canadian and international interests. The firm has substantial presence in Canada’s major commercial centres and in New York City, US and London, UK.
On March 6, 2024, the U.S. Securities and Exchange Commission (the "SEC") adopted S7-10-22 – The Enhancement and Standardization of Climate-Related Disclosures for Investors (the "U.S. Rules").
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On March 6, 2024, the U.S. Securities and Exchange Commission (the "SEC") adopted S7-10-22 – The Enhancement and Standardization of Climate-Related Disclosures for Investors (the "U.S. Rules"). The U.S. Rules' requirements include reporting, among other disclosures, material climate-related risks affecting the company, along with pertinent financial information, expenditures and activities undertaken to mitigate these material climate-related risks, the governance and oversight mechanisms in place to manage such risks, and in the case of larger issuers, Scope 1 and Scope 2 greenhouse gas emissions for larger issuers.

Notably, the U.S. Rules will apply to publicly traded U.S. and foreign registrants, including companies that have reporting obligations as "foreign private issuers" in the U.S. However, Canadian issuers that file in the U.S. under the Multijurisdictional Disclosure System are exempt from preparing climate-related disclosures under the U.S. Rules.

The U.S. Rules represent a major update to the SEC's disclosure regime and serve as a significant step in the global movement towards compulsory, enhanced climate-related reporting. As the Canadian Sustainability Standards Board (the "CSSB") unveiled its proposed disclosure standards on March 9, 2024, the CSSB standards, alongside the recently established US Rules, are set to play an influential role as the Canadian Securities Administrators (the "CSA") prepare a revised version of a proposed framework on climate-related disclosures.

For more information on the SEC's climate-related disclosure rules, and the possible implications for the CSA's framework, please refer to our detailed blog post for further insights.

McCarthy Tétrault's national, multidisciplinary ESG and Sustainability team works closely with our firm's leading capital markets practice and is especially well-equipped to provide clients with a full suite of advice and support to assist them in integrating ESG thinking into their organizational DNA. With a robust understanding of business, industry, and market drivers, we can deliver contextualized advice and guidance. Please contact the authors to learn more – we would be happy to assist you.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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