Digging into the SEC climate disclosure rules

What this episode covers

Mallory Thomas, a risk advisory partner at Baker Tilly US, discusses the SEC's final climate disclosure rules, explaining that the removal of Scope 3 emissions reporting significantly reduces the burden for smaller companies while maintaining a focus on Scope 1 and 2 data and climate risk. She contrasts the US's single materiality approach with the EU's Corporate Sustainability Reporting Directive (CSRD), which mandates double materiality, and notes that California’s existing laws often make the SEC rules redundant for large multinationals. Thomas highlights that the primary value of the SEC rule is standardizing reporting for comparability among investors, rather than mandating emission reduction targets, and warns that the patchwork of state-level regulations like those in New York and Illinois will create complex compliance challenges for companies operating across multiple jurisdictions.