5 instant reactions from KPMG on SEC proposed rules

In response to today’s proposed rules on climate-related disclosures for investors, below are statements and key data points (including new data) from KPMG leaders.

While these rules are only proposed at this stage, this represents a watershed moment that dovetails with existing demands from the investor community.

Please reach out if you’d like to discuss these topics further.

ESG engagement is a multi-year journey, but the SEC has now shifted timelines forward for companies to operationalize strategy to gain a competitive edge. We know from talking to CEOs that they do not view this as just a compliance exercise, but a unique opportunity to respond to the demands of investors, customers, and employees to unlock value and build trust. In that context, the SEC’s proposal will raise the bar across businesses, demanding deeper ESG engagement to gain that edge.
Rob Fisher, KPMG US IMPACT Leader
The SEC’s action underscores the imperative for businesses to understand likely reporting requirements and connect them to their strategy and operations. The details will be pored over, but management teams and Boards must take note – the ESG moment is accelerating in the United States.
Scott Flynn, KPMG US Audit Vice Chair
We are crossing the Rubicon. Under the proposed rules, climate-related financial disclosures will not be theoretical, but a baseline expectation with requirements for reasonable assurance for direct and indirect emissions. Further, as carbon reduction ambitions turn into actions, the impact of climate risk on many elements of financial reporting will now be required to be disclosed, including for the value chain for many filers. Today, CFOs and Audit Committees will need to take a hard look at their ESG reporting strategy, so it shows how they are successfully executing on their ESG strategy.
Maura Hodge, KPMG US IMPACT Audit Leader
Climate disclosures are not just about meeting reporting requirements, but having the data and insights needed to effectively reduce carbon footprints. Organizations need a strong data strategy coupled with a technology and governance approach that can manage complexity and adapt to future changes while enabling a transparent, audit-ready process.
Tegan Keele, KPMG US IMPACT Climate Data & Technology Leader
The SEC’s proposed rule will rapidly accelerate an already-urgent imperative within the C-Suite to tackle climate change and adequately disclose climate risk. We expect organizations will rapidly advance climate disclosure strategies and climate transition plans as well as invest in greater quality of climate data. No doubt, this proposal represents a shift toward greater disclosure and assurance of climate risk data.
Katherine Blue, KPMG US IMPACT Advisory Leader

Quick Facts from SEC’s Proposed Amendments

  • As expected, the SEC proposed rules would require domestic or foreign registrants to include certain climate-related information in registration statements and periodic reports, such as Form 10-K, including:
    • Climate-related risks and their actual or likely material impacts on the business, strategy, and outlook
    • Governance and risk management processes related to these risks
    • Greenhouse gas emissions
    • Certain climate-related financial statement metrics and related disclosures in a note to its audited financial statements
    • Information about climate-related targets and goals
  • Scope 1 and Scope 2 GHG emissions would be separately disclosed, and subject to reasonable assurance by Fiscal year 2026 for large, accelerated filers, and 2027 for accelerated filers.
  • Scope 3 emissions – capturing a registrant’s value chain’s GHG impact – would be required to be disclosed if material or if the registrant has set a GHG emissions target that includes Scope 3 emissions.
  • Filers would also be required to disclose the impact of climate-related events (severe weather events and other natural conditions) and transition activities on the line items of a registrant’s consolidated financial statements, as well as the financial estimates and assumptions used in the financial statements.
  • If a registrant uses an internal carbon price, information about the price and how it is set would be required to be disclosed.
  • Overall, the SEC rules would require disclosures to be in the aggregate, not including offsets. If carbon offsets or renewable energy certificates are used as part of the registrant’s carbon reduction plan, certain information, such as the amount of carbon reduced, would be required to be disclosed.
  • The phase-in period means filings subject to these proposed rules would begin in 2024, representing fiscal year 2023 data.

The Data Behind The Story

The WHY is clear: ESG engagement has been driven by investor demand and CEOs seeking to gain an ESG advantage in the marketplace with talent and customers.

  • In the Fall, US CEOs reported the top two areas of risks associated with failing to execute an ESG strategy were disengaged employees and recruitment challenges (33%) and competitors gaining an edge (32%).
  • A follow-up KPMG survey of 3,300 financial professionals found more than half of respondents indicated climate change-related financial disclosures were an opportunity to demonstrate their ESG edge to employees and investors, while distancing themselves from competitors. Only 32% saw these disclosures as mostly a compliance exercise.
  • CEOs reported institutional investors (46%) are still the tip of the spear when it comes to ESG demands, even more than regulators (25%).

The HOW is the challenge: Companies must understand globalizing standards, data and technology needs, and the complexity of their supply chain.

NEW KPMG data finds:

  • In 2022, US CEOs reported the biggest challenges to delivering on their companies’ ESG strategies this year, CEOs cited changing regulations (25%) and lack of standard measurement metrics (19%).
  • However, longer-term, US CEOs reported the complexity of supply chains and the lack of appropriate technology solutions were the top barriers to achieving Net Zero.
  • Importantly, the cost of decarbonization is NOT reported as a significant barrier to act. 

The WHAT reported is beginning to take shape: Yet the path to high quality, relevant and timely climate-related disclosures require companies to act now.

In 2020, among the top 100 companies across 52 countries:

  • 40% of firms acknowledged climate change in financial disclosures, up 15 percentage points since 2017.
  • Just 1 in 5 reported in line with the framework from the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD).
  • 51% invested in assurance.


Media Contact

Elizabeth Lynch

Elizabeth Lynch

Manager, Corporate Communications, KPMG US

+1 201-505-6316














Rob Fisher

Rob Fisher


+1 804-782-4226










Scott Flynn

Scott Flynn

Vice Chair - Audit, KPMG US

+1 212-954-2675










Maura Hodge

Maura Hodge

ESG Audit Leader, KPMG US

+1 803-606-8370












Tegan Keele

Tegan Keele

Climate Data & Technology Leader, KPMG US










Katherine Blue

Katherine Blue

ESG and Climate Change Leader, KPMG US

+1 404-222-7606