Regulators move to require companies to disclose climate risks

Financial regulators on both sides of the Atlantic moved this year to require companies to disclose their exposure to climate change and, in some cases, their greenhouse gas emissions, aiming to give investors clearer and more consistent information about the climate risks and impacts of the businesses they own.

In the United States, the securities regulator adopted long-awaited rules requiring publicly listed companies to report certain climate-related risks and, for larger firms, some of their emissions, though the final rules were scaled back from initial proposals amid intense pushback and legal challenges.

In Europe, more far-reaching sustainability reporting requirements began to take effect, obliging a broad range of companies to disclose detailed information about their environmental and social impacts under a standardised framework.

The push for mandatory climate disclosure reflected a growing consensus that investors need reliable, comparable information to assess climate risks — from a company's vulnerability to extreme weather and the energy transition to its contribution to emissions — and that voluntary disclosure had proved patchy and inconsistent.

The new rules were welcomed by many investors and advocates as a crucial step toward transparency and accountability, pressuring companies to measure and manage their climate impacts. But they also drew fierce opposition from some business groups and politicians, who argued they were burdensome, overreaching or politically motivated, and legal battles ensued.

The contested rollout underscored how climate had become a central and divisive issue in finance and corporate governance, and marked a significant, if hard-fought, move toward making climate risk a standard part of the information companies must reveal.