detailed disclosure of (i) their plans to transition to a lower-carbon economy and associated climate targets, including explaining how such targets compare with those established by the latest international agreement on climate change; and (ii) their proposed reliance on carbon offsets to achieve those targets. The SEC Proposal also requires issuers to disclose their anticipated use of carbon offsets and renewable energy credits to achieve their emissions-reduction goals. The CSA Proposal contains no corresponding requirement. The 2022 Review suggests that the mining sector generally may still have some work to do in this regard, since only 55% of reviewed issuers provided disclosure regarding their strategies or plans to transition to a lower-carbon economy. It is far from certain that the SEC Proposal will be finalized as currently drafted. The calls for public feedback on the SEC Proposal resulted in over 7,000 responses, a clear indication of the extent of stakeholder interest and a clear sign that the SEC will have much to consider before signing off on the final version of the draft rules. Furthermore, it is worth noting that the future of the SEC Proposal has been cast in doubt by the recent decision of the U.S. Supreme Court in West Virginia v Environmental Protection Agency . Although the decision concerned the ability of the U.S. Environmental Protection Agency to regulate GHG emissions, the court’s reliance on the so-called major questions doctrine may have set the stage for a similar challenge to the SEC’s authority to mandate climate disclosure (this doctrine restricts the ability of federal agencies to create or adopt rules that would have “transformational” effects on the economy). Commentators have also suggested that the SEC Proposal may be challenged on the grounds that not all the information and data required to be disclosed under the draft rules are material from the investor’s point of view, and that the SEC is authorized only to mandate the disclosure of information or data that satisfy such a materiality threshold.
The calls for public feedback on the SEC Proposal resulted in over 7,000 responses, a clear indication of the extent of stakeholder interest and a clear sign that the SEC will have much to consider before signing off on the final version of the draft rules.
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Governance Insights 2022
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