SEC’s Low Bar for Climate Accounting Disclosures Vexes Industry

A little known provision of the SEC’s sweeping climate plan that calls on companies to tally how extreme weather events and the transition to clean energy could impact their financial performance has drawn strong opposition from accountants and auditors, including the Big Four firms.

Much of the controversy around the proposed rule has focused on the need for companies to detail the pollution emitted by customers and vendors, but requirements that they tally the financial impact of floods, droughts and other climate risks on every financial statement line item causes the most heartburn for auditors and accountants.

If climate issues ...