SEC votes to approve major climate disclosure rule, scaled down from earlier draft

The Securities and Exchange Commission approved a long-anticipated rule to mandate that companies issue reports to investors on the effects of their operations on climate change.

The commission voted 3-2 to adopt the rule, part of President Joe Biden’s broader climate agenda, which envisions cutting greenhouse gas emissions by more than half, when compared to 2005 levels, by the end of the decade.

The controversial rule was first proposed last March and creates guidelines for how and what companies must report to investors about how their operations affect the climate. It requires companies to report direct greenhouse gas emissions — reports that would be audited by an outside party.

The rule is significantly pared back from a proposed version by omitting a requirement that corporations disclose emissions generated by suppliers and customers. Still, it is expected to face legal
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