Climate-Impact Disclosure Is Common Sense
The momentum behind mandatory climate-risk disclosure is building globally. By acting now on its own proposed rule change, the US Securities and Exchange Commission would provide a much stronger foundation for markets to stand on, and the US would remain a global rule-maker, rather than becoming a rule-taker.
WASHINGTON, DC – I spend most days advocating for action that could be considered radical. But today, I am advocating for plain common sense. In March, the US Securities and Exchange Commission proposed a new rule that would require publicly traded companies to disclose their climate-related risks and greenhouse-gas (GHG) emissions. Now that the public comment period has ended, the SEC should adopt the new disclosure rule in its entirety.
As written, the proposed rule would require companies to disclose GHG emissions data for their own operations, as well as for the goods they buy and sell. It would apply to all companies publicly traded in the United States, and thus to the $82 trillion worth of trading that the SEC oversees each year.
The rule may sound sweeping, but it is really just about information. Businesses should be required to share with investors how climate change could affect their returns. Information is the bread and butter of financial regulators, CEOs, investors, and markets generally. Each trade is connected to an investor making decisions based on the best available information. There is nothing radical about wanting more.