Center for American Progress

RELEASE: CAP Comment Letter on SEC’s Climate Disclosure Rule Affirms the Rule’s Necessity and Strength

RELEASE: CAP Comment Letter on SEC’s Climate Disclosure Rule Affirms the Rule’s Necessity and Strength

Washington, D.C.—In a comment letter submitted to the Securities and Exchange Commission (SEC) today, the Center for American Progress applauds the agency for taking a major step forward to ensure that investors are informed about how climate risks are affecting public companies as weather-related effects worsen and the economy adapts. The commission’s proposed rule, “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” would require public companies to disclose typical qualitative information about climate-related financial risks, governance, and trends; financial statement notes detailing the financial impacts of those risks; and greenhouse gas emissions, which investors use as an indicator of performance as companies navigate the transitioning energy economy.

CAP’s comments affirm the many strengths of the proposal while also recommending ways to ensure that the final rule is as robust and legally durable as possible.

“As demonstrated by many securities experts in the public comments, the SEC’s proposed climate disclosure rule is solidly within the agency’s legal authority and a critical and long overdue step toward protecting investors and ensuring that capital markets are efficient, orderly, and fair for all participants,” said Alexandra Thornton, who leads the SEC climate disclosure response at the Center for American Progress. “Companies are already experiencing the physical impacts of climate change and climate related changes in technologies, markets, and consumer behavior. These physical and transition risks are certain to worsen and become more widespread, regardless of what the SEC does or doesn’t do. But the SEC can ensure that companies disclose to investors in a standardized and comparable manner which of these risks will affect them and the current and anticipated financial impacts of those risks.”

Read CAP’s comment letter here.

For more information or to speak to an expert, contact Julia Cusick at jcusick@americanprogress.org.