FASB: No specific project to integrate SEC climate disclosures in accounting principles

The Financial Accounting Standards Board (FASB) has said it has no specific project to integrate the SEC’s climate disclosure rule in future accounting principles, days after anti-ESG states asked it not to “politicise” its standards.

“We do one thing and one thing only, financial accounting and reporting standards,” said FASB Chair Richard Jones last week at a meeting of the Financial Accounting Foundation (FAF) Board of Trustees.

The day before, the treasurers of 22 conservative-leaning US states had written to FASB asking it to refrain from integrating climate disclosure in future versions of the generally accepted accounting standards (GAAP) – something they would consider a “politicisation”.

GAAP are the standard rules used by public companies in the US for preparing, presenting and reporting financial statements that are complete, consistent and comparable – as mandated by the Securities and Exchange Commission (SEC).

FASB is the organisation responsible for revising them on a regular basis, and recently launched a new consultation to set the agenda for the next set of revisions. However, a FASB representative tells CSO Futures that “there's no FASB project specifically addressing” the integration of the SEC’s disputed climate disclosure rule in future versions of GAAP.

New ‘anti-ESG’ challenges from conservative states

Conservative states have challenged the SEC climate disclosure rule in court – leading the commission to temporarily pause its implementation – and now warned FASB not to act as an “environmental regulator”.

Read also: SEC defends climate disclosure rule in court brief

In an 11-page-long open letter published on August 12, the states treasurers of Alabama, Alaska, Arizona, Arkansas, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, Texas, Utah, West Virginia and Wyoming argued that requiring specific climate-reporting rules would be inconsistent the GAAP principles of sincerity and prudence: sincerity “because they promote a partisan agenda to achieve the goals of the Paris Agreement” and prudence “because they call for speculation about the existence and impact of possible future climate-related laws and regulations”.

“FASB should not repeat what it did in 2021 and add any topic relating to such ESG- reporting standards to its forthcoming 2024 agenda consultation,” they added.