The SEC estimates that climate disclosures will cost small cap companies approximately $420,000 per year on average and $530,000 for larger public companies.
The winners will be law firms, accounting firms and the SEC at the expense of companies. It is logical that this type of punitive legislation and time-consuming disclosure will push out IPO dates. Climate disclosures will be a flat tax on companies reminiscent of 2002’s Sarbanes Oxley act. Those that were in the Asset Management business in the early 2000’s will recall how Sarbanes Oxley caused a number of small cap companies to miss earnings estimates as the initial SEC compliance effort consumed significant management bandwidth and expense. Read more HERE about forthcoming SEC climate disclosure regulation.