Benchmark prior transactions, bonds, loans or company profiles using over 300 credit metrics.

Comparables

AI transcripts & instant analysis, making earnings season easier than ever.

Earnings

A full suite of ESG data and analysis. Built for your workflow

Spot undervalued credits and potential future restructurings with our purpose-built tools.

Distressed and Restructuring

Full Financial profiles with 3 statements, KPIs, segment splits & credit metrics. All traced to source documents.

Financials

New deal analysis and covenant comparison tools, understand key risks in seconds not days.

Covenants

Say goodbye to CTRL + F with our powerful search. Thousands of documents text searchable for any keyword or phrase.

Search

We've successfully predicted more than 65 price sensitive events - before they happened.

Deal predictions

We use AI to aggregate newsflow from 2,000 sources, and deliver it to your inbox quicker than anyone else.

News

Track high yield deals from issuance through to maturity, with integrated legal, credit and ESG analysis.

High Yield Bonds

Shine a light on private markets with 9fin's news and legal analysis of syndicated loans

Leveraged Loans

21st century tech and expert analysis to help CLO teams make informed decisions faster.

Structured Credit 

Find information others can't see in one of the fastest growing corners of finance

Private Credit 

Last month, the Securities and Exchange Commission (SEC) announced that it will require public companies, and companies with public SEC-registered securities, to include particular climate-related disclosures when filing registration statements and periodic reports.

A number of companies in the 9fin universe look set to be in-scope, meaning that this proposal will significantly increase the availability of data for those in high yield; starting in 2023 for the largest companies. Because form 20-F filers will be included, the Europe-US disclosure ecosystem could symbiose, leading investors to expect the SEC climate disclosures from companies they deal with whether they file with the SEC or not.

The new rule isn’t yet in its final form. There will be further comments and amendments to the proposal.

But its overall purpose and structure provides an indication of where the regulator is heading. Financial market players and listed companies under the auspices of the SEC should have already seen enough by now to take action in preparation for some form of mandated climate-related disclosure.

The 510-page proposal builds upon the framework provided by the Mark Carney-backed Task Force on Climate-Related Financial Disclosures (TCFD) with some additions. Details on climate-risks are to be provided including:

Short, medium, and long-term risks identified to the filer’s business and financial position

Present or likely risks to the filer’s strategy, business model or outlook


Also required are descriptions of how risks identified above are managed by the filing company:

Methods for identifying, assessing and managing climate risks and whether these are embedded in centralised risk frameworks

Whether the filer has a transition plan for a lower-carbon economy or an increase in climate regulation — and the metrics and targets to find and manage physical and transition risks

Whether the filer uses scenario analysis — and the parameters, assumptions and predicted financial impacts

Whether the filer uses an internal carbon price, as well as its value and method for deciding it


The most significant points of the proposal are those to do with key targets and metrics related to carbon emissions.

Some of these requirements move beyond TCFD reporting in their stringency or detail, and include:

Scope 1 and 2 emissions and emissions intensity

Auditing of scope 1 and 2 emissions for ‘large filers’ with a $700m float or higher

Scope 3 emissions if material and if included in targets

Climate-related targets including; activities included, time horizon, methods to fulfil, if offsets or renewable energy certificates (RECs) are to be used:
- Significant details of offsets and RECs used include the amount generated or offset, project details, locations and sources, and accreditations

Forcing public companies to publish their scope 1 and 2 emissions is a big shift, despite many companies already doing so. Around a quarter of the largest companies do not disclose their Scope 1 and 2 emissions, and the figure is worse for firms outside the largest 200. Large filers ($700m float or above) will need to have scope 1 and 2 figures audited, meaning investors can be confident that what is reported is accurate.

Scope 3 emissions are often neglected, with 40% of the largest companies not including them in disclosures, but they make up the bulk of emissions for many industries. Despite the SEC allowing a ‘safe harbour’ for Scope 3 emissions figures to be estimated, the disclosure requirement will be valuable for investors. The SEC requires reporting Scope 3 emissions by SEC filers only ‘if material’.

There has already been debate on whether this will lead to lots of Scope 3 reporting, or hardly any, with the looming prospect of legal challenges to the proposal based on claims of the immateriality of climate-related disclosure. 16 state attorneys in the US have already sent a letter to the SEC stating that they will fight the proposal through the rule-making process and in court if necessary. However the increasing importance of climate information both for public policy and for investors as they attempt to demonstrate to society that they are responsible, may be enough to prove that such disclosures are material for shareholders.

The European Union Corporate Sustainability Reporting Directive (CSRD) climate disclosures prototype, which will define how EU companies report emissions, calls for reporting Scope 3 emissions estimates based on significant categories. These are to cover at least ~80% of the company's total scope 3 emissions, with an explanation for any excluded categories.

One of the most anticipated requirements in the SEC proposal is the definition of carbon reduction targets, and whether filing companies will rely on offsets or purchased green energy for these.

One of the key differences between carbon neutrality and carbon net zero is that a carbon neutral company can rely completely on offsets to counterpoise its emissions footprint while a carbon net zero company will actively reduce its emissions as best it can and then offset what is left over. These terms are sometimes used interchangeably or are overlapping which makes the low-carbon transition claims by companies difficult to judge. The SEC proposal will shed light on this aspect of net zero claims and make benchmarking easier for investors.

What is also encouraging about the SEC proposal is not just the detail, but the facts that an important US regulator is finally taking a position on climate disclosures.

Europe has tended to lead the way on environmental disclosure rules with the UK Financial Conduct Authority requiring TCFD disclosures, and the EU Taxonomy and Sustainable Finance Action Plan increasingly engulfing parts of the financial markets.

While Europe introduced this climate-related legislation, the Trump Administration between 2017 and 2021 actively repealed a number of pro-environment laws while the President himself called climate change a ‘hoax’. With mixed signals from the largest markets, investors could not be sure how seriously to take climate change in the short term.

Now the US markets authority is giving the green light to climate-related disclosure, there is certainty about this topic as a legitimate area of concern. With the backing of serious institutions, company boards and executive teams can treat climate change with intent while preserving their professional integrity.

Despite coming into play in 2023 for the largest companies, the likelihood is that this proposal will kickstart activity for both companies and investors who will want to be prepared for whatever requirements are finally enacted. There may be changes made between the draft and formalised SEC rules, but the overall trend is clear — climate change is on the agenda.

So when can we expect to see private US companies included in a climate-related directive, bringing in more sponsor-backed firms who issued leveraged loans and HY bonds?

The SEC only regulates companies listed on stock exchanges and organisations involved in the sale and purchase of SEC-registered securities, including private fund advisors. Disclosure requirements for private companies tend to be under the jurisdiction of the state in which they are formed, making it more difficult to get consistent disclosure in the US than a single country like the UK or a single market like the European Union. However, there is potential for market participants to demand better disclosure from private companies after familiarising themselves with higher-quality information from listed borrowers or those with SEC-registered bonds.

Some US states with a strong position on climate action may also issue their own disclosure requirements. For example, California has already passed legislation which will enforce mandatory Scope 1, 2 and 3 emissions reporting on public and private companies earning over $1bn which operate in the State.

In April 2021, the EU adopted a proposal for a Corporate Sustainability Reporting Directive that would include large unlisted companies in its remit, to replace the current Non-financial Reporting Directive which was ratified in 2013. It took eight years for the pioneers of sustainable finance regulation to ensure certain unlisted companies begin to disclose in-line with publicly traded counterparts.

States like California include private and public companies in its new climate disclosure bill as a trade-off with naysayers who pushed to remove science-based target requirements before the bill passed.

How long it will take to define this as standard practice across global markets is uncertain, but for now a greater proportion of the 9fin universe is set to disclose more than we have seen previously. The 9fin platform is soon to have ESG data related to the most significant standards, guidance and regulation rolled out across the leveraged finance universe. For more information on this new offering use our online form here.

The SEC Climate Disclosures Proposal

Owen Sanderson

Excess Spread — Sweet release, baked Danish

9fin team

Webinar Replay — Free fallin': Chapter 11 trends that defined 2025 and what's next

Sasha Padbidri

Luke Viner

The Singapore cross-class cramdown provision’s future is now

Webinar Replay — The art of the LME: defining trends in 2025, and looking ahead to what’s next

Save time, react faster to news, outperform your peers.

Asset Managers & Hedge funds

Save time, pitch more efficiently, and win business.

Investment Banks

Turbocharge your trading desk P&L, with the market's fastest news alerts.

Sales & Trading

Spot novel covenants, save time drafting and win business.

🍪 Our Cookies

The SEC Climate Disclosures Proposal

Read all our public content for free

Recently Published

Excess Spread — Sweet release, baked Danish

Webinar Replay — Free fallin': Chapter 11 trends that defined 2025 and what's next

The Singapore cross-class cramdown provision’s future is now

Webinar Replay — The art of the LME: defining trends in 2025, and looking ahead to what’s next

What are you waiting for?