Sustainable Disclosure
With all eyes focused on the SEC’s new changes to the crypto policy on public exchanges, new legislation has reached the rule books that may affect the way markets will perceive several companies. The Securities and Exchange Commission, otherwise known as the SEC, is the independent governing body that enforces all laws related to the stock market. Because of this, all the new movements made by the SEC have major implications for investors. Earlier this year, the SEC allowed crypto to be traded on spot ETFs for the first time, a leading component as to why the price of Bitcoin has surged over 50% this year alone. On Wednesday, the SEC announced a successful vote toward new measures that deal with a company’s climate-risk activity.
This week, the SEC voted a majority 3-2 to force publicly listed companies to report climate disclosures. This piece of legislation will act to allow investors to see exactly how much risk a certain company imposes on warming the planet through greenhouse gas emissions. According to several climate activists, the new rule is backed by the idea that climate risk could be considered a financial risk, and transparency over a company’s emissions can help investors decide whether the stock is worth its market price. Currently, the regulation asks companies to disclose climate risks that directly affect any of their operations or financial conditions, also including releasing climate-related goals, transition plans, and more. Although the rule was approved by the SEC, experts have assumed there may be challenges that could have the law decided by another government entity.
