The Nickel Report

On September 22, 2021, the Division of Corporation Finance (Division) of the Securities and Exchange Commission (SEC) issued a sample comment letter to highlight its increased focus on climate change-related disclosures or the absence of such disclosures in issuer filings under the Securities Act and the Exchange Act. This sample comment letter follows a recent increase in climate-related comments the Division has issued during the disclosure review process, and many of the sample comments appear to be derived from actual comment letters issued in 2021. The sample is consistent with the SEC’s 2010 Guidance Regarding Disclosure Related to Climate Change, which does not mandate specific, line item climate change-related disclosures, but instead takes a principles-based approach.

The US Securities and Exchange Commission (SEC) has adopted amendments to modernize its Regulation S-K and thereby change the rules related to environmental disclosure requirements and increase the reporting threshold for disclosure of actual or potential environmental penalties.[1]  In doing so, the SEC is updating rules that have not been revised significantly in 30 years.  Proposed last year as part of the SEC’s Disclosure Effectiveness Initiative, [2] the amended rules, which were adopted on August 26, 2020, are intended to improve disclosure for investors and simplify compliance for registrants.  As described in the rule preamble, the amendments are “intended to improve the readability of disclosure documents, as well as discourage repetition and disclosure of information that is not material.” [3]

A recently successful effort by Wisconsin utility MGE Energy to exclude an environmental proposal from its proxy statement may signal a new approach for boards of directors to consider when managing vexatious shareholder proposals.