The Securities and Exchange Commission (SEC) has made new rules to help investors get clear and consistent information about how climate change might affect companies they’re investing in. These rules make it necessary for public companies to tell investors about any big risks from climate change that could affect their business. They also have to explain what they’re doing to deal with these risks.

The SEC Chairman, Gary Gensler, says these rules are about making sure investors get honest and complete information when they invest in companies. These new rules are based on the idea that investors should know about any risks a company faces because of climate change.

Here’s what the new rules require companies to disclose investors:

• Any big risks from climate change that might affect how the company works, makes money, or its financial health.
• How these risks could affect the company’s plans, how it works, and its future.
• If the company is doing anything to deal with these risks, they have to explain what they’re doing and how much money they’re spending on it.
• Details about the company’s efforts to reduce its carbon footprint or adapt to climate change, like using clean energy or making plans for different climate scenarios.
• Information about how the company’s board of directors and management team are dealing with these climate-related risks.
• Any plans or goals the company has related to climate change and how these plans might affect its business and finances.
• For bigger companies, they also have to disclose information about how much greenhouse gases they produce directly or indirectly through their activities.
• Companies have to provide a report confirming the accuracy of their greenhouse gas emissions information, to assure investors.
• Details about any costs or losses the company faces because of extreme weather events or other natural disasters caused by climate change.
• If the company is using things like carbon offsets or renewable energy credits to meet their climate goals, they have to tell investors about it.
• If climate change or related goals affect the company’s financial statements, they have to explain how.

Before making these rules final, the SEC looked at feedback from lots of people and groups, and now these rules are ready to go. They’ll be effective in 60 days after being published, and companies will have some time to get in line with these new requirements.