I think I’ve broken them with logic and good engineering behind me.” “And I’ve broken some rules to make this.
“I think it was General MacArthur who said you’re remembered for the rules you break,” Rush said in a video interview with Mexican YouTuber Alan Estrada last year. In another interview, Stockton boasted that he’d “broken some rules” in his career. “I mean, if you just want to be safe, don’t get out of bed. “At some point, safety just is pure waste,” Stockton told journalist David Pogue in an interview last year. Rush has approached his dream of deep-sea exploration with child-like verve and an antipathy toward regulations - a pattern that has come into sharp relief since Sunday night, when his vessel, the Titan, went missing. The technology sector asked the SEC to consider flexibility in the reporting timelines for new and historical climate-related data.Stockton Rush, the CEO of OceanGate and one of five people on the submersible missing in the North Atlantic, has cultivated a reputation as a kind of modern-day Jacques Cousteau - a nature lover, adventurer and visionary. Financial institutions are particularly concerned with the SEC’s alignment with the TCFD framework and International Sustainability Standards Board. The SEC’s proposed rule would create a new disclosure framework with a more detailed disclosure regime than the Task Force on Climate-Related Financial Disclosures framework. The energy sector pushed back on the financial statement threshold, arguing that a disclosure of this nature would include irrelevant information and confuse investors, rather than help them to make informed decisions. Among areas of contention are the 1% disclosure threshold, reporting requirements greater than TCFD specifications, and Q4 emissions data proposed for inclusion within the 10-K reporting schedule. There is some consistency in pushback to the rule coming from the energy, financial, and technology sectors. What industry pushback has the proposed SEC climate disclosure rule sparked? Companies should anticipate variances – specifically, more narrow disclosure requirements than what is called for by the TCFD, as well as disaggregated financial reporting, and reporting timelines, says Bloomberg Law legal analyst Abigail Gampher. Yet frameworks like the TCFD do not provide surefire models for compliance with the proposed climate-related disclosure rules. However, companies cannot simply rely on frameworks like the EPA’s 2009 reporting of greenhouse gases rule, because it requires facility-specific reporting, not organizational reporting as mandated by the proposed issuer rule.
If a company is already providing ESG disclosures, they may be in a better position to comply with the proposed rule’s requirements. Public companies should first review existing frameworks, such as the Task Force on Climate-Related Financial Disclosures (TCFD) and Greenhouse Gas (GHG) Protocol. In-house counsel must consider complications that may arise in executing the more expansive climate-related disclosure requirements. What considerations should in-house counsel make about the proposed SEC climate disclosure rule? If not carefully executed, the result could be greater investor confusion and expose organizations to legal risks. This more detailed disclosure framework would require greater internal resources and time commitments to produce and may inadvertently introduce inconsistent information into public filings like the 10-K, as well as annual reports to shareholders. Among other requirements, the new rule would mandate public companies delineate climate-related risks totaling 1% or higher of a total line item in relevant year financial statements. In a significant departure, the proposed rule would expand climate-related disclosures beyond the materiality standard. Beyond specified ESG reporting requirements based on materiality, issuers typically make any other ESG disclosures through voluntary frameworks, like sustainability reports. Levinson, offers companies considerable discretion in determining what constitutes appropriate climate-related disclosures. Northway, Inc., and reaffirmed more than a decade later, in Basic Inc. Supreme Court 1976 decision, TSC Industries, Inc. To date, companies have largely relied on 2010 guidance, with disclosures based on materiality. All that may soon change, as the proposal calls for ESG reporting that goes well beyond current mandates. What implications does the proposed SEC climate disclosure rule hold?Ĭurrently, the SEC does not require extensive line-item disclosure of ESG matters.
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