Press Release

SEC Proposes Disclosure Rules for Climate Financial Risks; Requests Comment

Securities and Exchange Commission proposes amendments to ensure market participants have more transparency behind climate related investment risks.

New York, N.Y. — The Secu­ri­ties and Exchange Com­mis­sion (SEC) pro­posed amend­ments that would enhance and stan­dard­ize reg­is­trants’ cli­mate-relat­ed dis­clo­sures for investors at today’s open meet­ing. This move sig­nals a ris­ing need for trans­paren­cy among investors regard­ing their com­pa­nies’ green­house gas emis­sions and the under­ly­ing risks asso­ci­at­ed with their busi­ness practices.

It is well-rec­og­nized that investors need reli­able infor­ma­tion about emis­sions, plans to reduce emis­sions, and cli­mate-relat­ed risks,” said Bethany Davis Noll Exec­u­tive Direc­tor of the State Ener­gy & Envi­ron­men­tal Impact Cen­ter. The SEC’s pro­pos­al promis­es sig­nif­i­cant ben­e­fits in requir­ing the dis­clo­sure of this infor­ma­tion and stan­dard­iz­ing it.”

Back­ground — In March 2021, SEC request­ed com­ments on cli­mate change dis­clo­sures for investors and oth­er mar­ket par­tic­i­pants. The request includ­ed a list of ques­tions for con­sid­er­a­tion and explained SEC plans to eval­u­ate whether its dis­clo­sure rules suf­fi­cient­ly equip investors with con­sis­tent, com­pa­ra­ble, and reli­able infor­ma­tion on cli­mate change.” 

In June 2021, in response to that request, a coali­tion of 12 attor­neys gen­er­al (AGs) led by Cal­i­for­nia AG Rob Bon­ta filed com­ments. In their fil­ing the AGs stat­ed, Cli­mate change is not a dis­tant prob­lem to be dealt with in the future; it is here, and it threat­ens the U.S. econ­o­my and its finan­cial sys­tem.” Fur­ther com­ments from AGs in this coali­tion were doc­u­ment­ed in our press release from this date. An oppos­ing coali­tion of 16 AGs also filed com­ments in June 2021 urg­ing the com­mis­sion not to expand its con­gres­sion­al man­date into unre­lat­ed social matters.”

As demand for more infor­ma­tion on cli­mate finan­cial risks has grown, the State Ener­gy & Envi­ron­men­tal Impact Cen­ter host­ed, in col­lab­o­ra­tion with the Wood­well Cli­mate Research Cen­ter and the Mass­a­chu­setts Office of Attor­ney Gen­er­al, a three-part series on this top­ic. The series, See­ing the Dan­gers Ahead: How Reg­u­la­tors and Advo­cates Can Har­ness Phys­i­cal and Finan­cial Risk Data to Tack­le the Cli­mate Emer­gency brought togeth­er pol­i­cy­mak­ers, ana­lysts, experts, and advo­cates to dis­cuss exist­ing data, gaps in the data need­ed to address cli­mate risks in an equi­table and just man­ner, and the role of com­pa­nies and deci­sion­mak­ers in address­ing cli­mate risk. 

The cli­mate risk series is avail­able online. A recent blog post sum­ma­rizes the take­aways from the series. 

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About the State Ener­gy & Envi­ron­men­tal Impact Cen­ter:
The State Ener­gy & Envi­ron­men­tal Impact Cen­ter at the NYU School of Law is a non-par­ti­san aca­d­e­m­ic cen­ter ded­i­cat­ed to the study and sup­port of state attor­neys gen­er­al in their work defend­ing and pro­mot­ing clean ener­gy, cli­mate, envi­ron­men­tal jus­tice, and envi­ron­men­tal laws and poli­cies. For more infor­ma­tion on the work of state attor­neys gen­er­al sub­scribe to receive our twice-month­ly newslet­ter.