Harvard Law School Forum on Corporate Governance Publishes Olshan Article on the SEC’s Focus on Climate-related Disclosures

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Harvard Law School Forum on Corporate Governance, the top online resource for discourse on corporate governance, recently published an article authored by corporate partner Jason Saltsberg entitled “SEC Announces That It Will Aggressively Scrutinize Issuer’s Climate Change Disclosure.” The article discusses the announcement by SEC acting chair Allison Herren Lee directing the Division of Corporation Finance to enhance its focus on climate-related disclosures in its reviews of corporate filings, following the SEC’s February 1 announcement of the appointment of its first-ever senior policy advisor for ESG issues. With no standardized disclosure required pursuant to Regulation S-K regarding climate change risk, acting chair Lee has directed staff to “assess compliance with disclosure obligations under the federal securities laws, engage with public companies on these issues, and absorb critical lessons on how the market is currently managing climate-related risks.” Climate change risks are anticipated to be among the Biden administration’s and the SEC’s top priorities, so Mr. Saltsberg concludes, “Issuers are advised to review their risk factors section to determine if it includes climate-related risk factors that specifically address their companies’ risks or ones that could apply generically to any registrant or offering. If the latter, issuers should revise and tailor such risk factors to emphasize the specific relationship of the risk to their companies. Deficient disclosure could lead to delays in public offerings as a result of additional SEC comments, SEC enforcement actions or securities litigation.”

SEC Will Aggressively Scrutinize Issuer’s Climate Change Disclosure

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