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The Securities and Exchange Commission will propose rules next week mandating that publicly traded companies disclose climate change–related information, according to The Wall Street Journal (subscription).

What’s coming: The rules, which are set for recommendation at a March 21 meeting, “are likely to require companies to report more standardized information about their greenhouse-gas emissions as well as climate-related risks they face now and in the future, [SEC Chairman Gary] Gensler has said.”

• Risks include the potential for damage to company facilities and operations from floods, wildfires or other extreme-weather events, as well as potential regulations designed to curb climate change.
• The SEC’s rule is also expected to include standardized requirements for greenhouse gas emissions reporting.
• After proposing the rule next week, the SEC will take public comments, likely for at least 60 days, before taking steps to finalize the rule.

The current situation: “Companies are currently required to report risks they consider material, or likely to be important in the eyes of a reasonable investor, including those stemming from climate change. Mr. Gensler, who was nominated by President Biden, has said such disclosures vary from firm to firm and are of limited use to investors.” However, some Republican legislators have said climate change rules from the SEC would push the boundaries of the agency’s mandate to protect investors.

NAM advocacy: The NAM weighed in when the SEC solicited feedback on climate disclosures last spring, saying that any reporting framework should be principles-based to support the disclosure of financially material climate-related information. The association also commented on recent SEC guidance on climate reporting and a new standard for climate-related shareholder proposals.

The NAM’s take: “Manufacturers are dedicated to being part of the solution to climate change and believe in the importance of providing material information about these efforts to their investors,” said NAM Senior Director of Tax and Domestic Economic Policy Charles Crain. “The NAM looks forward to working with the SEC to ensure that publicly traded companies and their shareholders can benefit from a principles-based climate disclosure framework.”

Learn more: The NAM will be hosting a webinar on the SEC’s climate disclosure rule on Tuesday, March 29. Register here.