Following the SEC’s 3-2 vote to enact a landmark climate disclosure rule that could affect up to 7,000 U.S. companies, the issue of materiality has come into sharp focus. In other words, what will be deemed significant enough to disclose to investors?

“The materiality question is the question here,” said Pillsbury White Collar & Corporate Investigations partner David Oliwenstein, who formerly served with the SEC’s Division of Enforcement.

“It adds to the uncertainty,” he added. “Whenever you’re employing a materiality standard and leaving it up to management judgment, different companies are going to reach different conclusions on very similar sets of facts.”

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