Thirty-five members of Congress demand update to climate change disclosure enforcement
A group of 35 US Democrat members of Congress, including presidential hopeful Bernie Sanders, have written to the SEC demanding stronger action to improve corporate disclosure of material risks from climate change.
The letter calls for an update to the regulator’s plans to implement its 2010 guidance, which intended to clarify companies’ responsibility to measure their greenhouse gas emissions, disclose details of the potential impact of international treaties regulating emissions, outline severe weather risks and impacts, and take other measures to inform investors how climate change may impact their performance.
‘The effects of climate change can pose material and evolving challenges for many companies, and investors deserve access to complete and accurate information,’ says Senator Jack Reed in a press release announcing the letter. ‘Our markets work best when investors have access to reliable information, and we should have every confidence the SEC is robustly enforcing the disclosure regulations on the books.’
The letter, signed by 16 senators and 19 members of the House of Representatives, asks eight questions of the SEC, covering areas including what steps the commission has taken to ensure companies understand their obligations related to climate change reporting and how it ensures compliance with climate change disclosure rules.
The letter also asks the SEC how many public companies have not complied with climate change disclosure guidance, to provide details about any improvements it has seen in relation to climate change disclosure, how it assesses the effectiveness of climate change disclosure rules and whether it has sought investor input into the guidance.
The members of Congress cite the US National Centers for Environmental Information in saying eight climate and weather disasters last year, including drought, flooding and severe storms, inflicted more than $1 bn in damage in the US.
‘The financial effect of these disasters, whether resulting from droughts, floods or severe weather, are precisely the types of risks the SEC cites as potential material disclosures in its climate change guidance,’ the members of Congress write. ‘With extreme weather and sea-level rise expected to worsen in the coming years, we believe the SEC may need to redouble its efforts to ensure all reporting companies are in [compliance] with the SEC’s climate change guidance.’
