It is a generally accepted accounting principle that financial statements should contain all material information of interest to an investor, creditor or buyer concerned. The types of information that must be disclosed include financial records, accounting policies applied, ongoing litigation, lease information and details regarding pension funding. In general, complete disclosure is required when other accounting policies are available, such as inventory valuation, depreciation and long-term contract accounting. In addition, accounting practices of a particular sector and other unusual applications of accounting policies are generally disclosed. With their expertise on ESG issues, in-house advisors are already well positioned to advise companies and communicate ESG initiatives to their boards. Nevertheless, they will face new challenges in the era of more robust ESG reporting. Among other things, in-house counsel must ensure that they maintain independent professional judgment in cases where ESG issues place them in a management advisory role. In addition to the executive compensation summary table currently required in the company`s proxy circulars, large companies must now provide a five-year history of compensation and performance measures in a new table, with a shorter three-year reporting requirement for small businesses. A public company whose class of securities is registered under Section 12 or subject to Section 15(d) of the Securities Exchange Act of 1934, as amended (« Exchange Act »), must file reports with the SEC (« Reporting Requirements »). Reporting obligations are based on regular and transparent information to shareholders and markets.

Reports filed with the SEC are available to the public on the SEC EDGAR website. The required reports include an annual Form 10-K, a quarterly Form 10Q and an updated periodic Form 8-K, as well as proxy reports and certain disclosure requirements for shareholders and affiliates. Subject to certain exceptions, a Form 8-K must be filed within four (4) business days of the event. No renewal is available for an 8-K. Companies file this report with the SEC to announce material or extraordinary events of which shareholders should be aware, including the entering into of material agreements; mergers and acquisitions; change of control; changes in the auditor; the issuance of non-registered securities; amendments to the company`s articles of association; changes to the name of the company; issues related to confidence in previously issued financial statements; change of officers or directors; Bankruptcy proceedings; Amendment to Shell Status Regulations F-D and voluntary disclosures (voluntary disclosures do not have a filing deadline). The proposed financial statement information would only be required in the audited financial statements and would therefore not be included in the interim financial statements filed on Form 10-Q (for Canadian registrants) or Form 6-K (for foreign registrants). In particular, S-X registrants would not be required to include the climate note in the financial statements on their Form 10-Q. Under Regulation S-K, they would not be required to disclose GHG emissions on their Form 10-Q because they would be disclosed in the annual return. In most cases, private companies are not required by law to disclose detailed financial and operational information. They have wide discretion in deciding what types of information should be made available to the public.

Small businesses and other private businesses can protect information from the public knowledge and determine who needs to know certain types of information. Public companies, on the other hand, are subject to detailed laws on disclosure of their financial condition, results of operations, executive compensation and other areas of business. While these disclosure requirements are primarily associated with large, publicly traded companies, many smaller companies choose to raise capital by making shares of the company available to investors. In such cases, the small business is subject to many of the same disclosure laws that apply to large businesses. Disclosure laws and regulations are monitored and enforced by the U.S. Securities and Exchange Commission (SEC). Below are the reports that generally constitute the reporting requirements of a public company and apply to small reporting corporations. A « smaller reporting entity » is an issuer that is not an investment company, asset-backed issuer or majority-owned subsidiary and that (i) had a free float of less than $75 million on the last business day of the last fiscal quarter ended; or (ii) in the case of an initial registration statement, had a public free float of less than $75 million at a time within a few days of filing the registration statement; or (iii) in the case of a zero free float issuer under (i) or (ii), had annual revenues of less than $75 million in the last fiscal year for which audited financial statements are available. To report on ESG issues, many companies implement one or more voluntary reporting frameworks. See a comparison of key ESG reporting frameworks.

If a shareholder vote is not requested, such as if a company received shareholder approval by written consent in lieu of a meeting, a company may comply with its requirements of section 14 by filing an information statement with the SEC and sending such a disclosure statement to its stockholders.