S.E.C. to Approve New Climate Rules Far Weaker Than Originally Proposed

The Securities and Exchange Commission is expected on Wednesday to approve new rules detailing if and how public companies should disclose climate risks and how much greenhouse gas emissions they produce, but there are fewer demands on businesses than the original proposal made about two years ago.

The rules represent a step toward requiring corporations to inform investors of both their climate emissions, as well as the business risks that they face from floods, rising temperatures and weather disasters. An earlier and more all-encompassing proposal faced outspoken Republican backlash and opposition from a range of companies and industries, including fossil fuel producers.

The main difference: Under the original proposal, large companies would have been required to disclose not just planet-warming emissions from their own operations, but also emissions produced along what’s known as a company’s “value chain” — a term that encompasses everything from the parts or services bought from other suppliers, to the way that people who use the products ultimately dispose of them. Pollution created all along this value chain could add up.

Now, that requirement is gone.

In addition, the biggest companies will have to report the emissions they directly produce, but only if the companies themselves consider the emissions “material,” or of significant importance to their bottom lines, a qualification that leaves corporations leeway. Thousands of smaller businesses are exempt, another big change from the original proposal, which would have required all publicly traded corporations to disclose their direct emissions.

Also gone from the final rules is a requirement that companies state the climate expertise of members on their board of directors.

But the directive for companies to disclose significant risks related to climate change — for example, risks to waterfront properties owned by a hotel chain from rising sea levels and storm surges — survived.