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Disclosures regarding any climate-related target or goal set by a company if the target or goal has materially affected or is reasonably likely to materially affect the company ' s business , results of operations or financial condition .
For many companies , the rules will require enterprisewide changes to how the company collects , assesses and reports climate-related data and other information , as well as changes to their governance structures and systems of controls . Changes may be driven both by the need to comply with the disclosure requirements and by a company ' s view of how its disclosures will be received by investors or the public generally .
The new rules provide for phase-in periods for compliance , and as expected , the rules are already facing legal challenges that , even if ultimately unsuccessful , could delay implementation of the rules .
However , because of the significant effort and degree of organizational change that compliance with the rules will require , companies should not wait to see the outcome of the legal challenges to begin assessing the impacts of the rules on their organizations or think that action can wait because of the phase-in periods .
Indeed , the rules require large accelerated filers with a calendar fiscal year to include much of the newly required disclosure for 2025 in their annual reports to be filed in early 2026 , meaning that they will need to have the systems in place to track and record the relevant information by the end of this year .
Assessing the potential impact of the proposed rules on a company and preparing the company for eventually complying with the rules will require participation from many different parts of the organization , but we expect that at many companies , the task of setting the company on a course to do those things will fall on the general counsel and other in-house counsel with responsibility for relevant substantive areas .
With that in mind , we have prepared the following guide for in-house counsel with respect to near-term actions their companies should be taking or should consider taking , depending on their circumstances .
1 . Engage senior management , the board of directors and relevant board committees to assess the governance , oversight and management of climate-related risks .
In-house counsel likely will be hearing from their CEOs and board members , if they haven ' t already , asking what the new disclosure rules mean for their company . In any case , in-house counsel should ensure that top-level management and board members understand the potential challenges and changes their companies may face with the new rules , and encourage an appropriate level of board and senior management oversight and engagement for their situation .
The new rules require companies to provide disclosures concerning their boards ' oversight of climaterelated risks , as well as management ' s role in assessing and managing those risks . Although many companies already have robust board oversight of environmental , social and governance matters , and include related disclosures in their SEC filings , the new rules will require specific disclosure regarding these matters by all SEC-reporting companies .
In that regard , in-house counsel may be asked what changes , if any , should be made to board or committee composition and structure in light of the new disclosure requirements . Among other matters , consideration should be given to whether the creation of a new ESG committee — or a purely